Trading Update | September 10, 2012 Heightened uncertainty caused by the European debt crisis,the slowdown in the Chinese economy and the possibility of new initiatives by the U.S. Federal Reserve have resulted in elevated cash positions in the Latin Stock Investing Model Growth Stock Portfolio and the LSI Model Dividend Stock Portfolio. When indications emerge as to how the resolutions to these issues will impact securities markets, appropriate modifications will be made to the LSI Model Stock Portfolios. Of the securities that remain in the portfolios, the 5.08% position of Administradora de Fondos de Pensiones Provida SA (NYSE:PVD – ‘AFP Provida’) in the LSI Model Dividend Stock Portfolio is being closely monitored. Indications are that the firm is possibly “in play” as a merger prospect. The Wall Street Journal reported last week that Mexico's Grupo Financiero Banorte SAB “might be interested in acquiring some of Banco Bilbao Vizcaya Argentaria SA's (NYSE:BBVA) Latin American pension and retirement businesses if the price were right.” BBVA, according to the Journal report, has been looking to sell its 51.6% interest in PVD, which reportedly controls a 15% market share of the pension administration business in Mexico. The firm also does pension management and administration business in Peru and and Ecuador. Mexico’s Grupo Financiero Banorte SAB may not end up with PVD for a number of reasons. These include a statutory cap of 20% that any firm can control the pension management business in Mexico, where a unit of Grupo Financiero Banorte already has a reported share of 13%. In addition, the Mexican banking firm might not have ambitions for pension management in the other countries where PVD does business. But it frequently turns out that when an owner is motivated to sell a business (and the troubled BBVA has plenty or worries in its home country of Spain) and at least one party starts to show some interest, a deal eventually evolves, even if a different buyer emerges. With its established position in a relatively stable industry serving multiple nations in a region experiencing economic growth, PVD makes an intriguing target for an acquisition. Recently priced at less than 11 times trailing earnings and with an indicated dividend yield of 7.7%, the firm represents a solid play on Latin American economic growth. Read more about this in the attached weekly update and ... Happy trading this week! Rudy These are some of the best performing stocks mentioned this week: Companhia Siderurgica Nacional S.A. (NYSE:SID) +16.0% Braskem (NYSE:BAK) +13.7% Telefonica S.A. (NYSE: TEF) +13.2% Rio Tinto plc (NYSE:RIO) +11.0% Vale S.A. (NYSE:VALE) +10.1% Data date: 9/7/12 If you can not see the file download button and link below for this posting it is because you are not logged in. Login or subscribe to see and download the latest trade ideas. It takes only 2 minutes to subscribe. read more