THE LONG VIEW

Old Republic (NYSE: ORI)

On track. For the first half of 2013, the insurer posted income of 88 cents per share vs. a loss of 13 cents in the year-ago period. Old Republic has turned profitable this year, the first time since the onset of the Great Recession. Book value was $13.95 per share at the end of June. In August, Old Republic raised its annual per share dividend by 1 cent, to 72 cents. Said Aldo Zucaro, Chairman and CEO: “We’re finally seeing the light at the end of the tunnel.”

AT&T (NYSE: T)

On a buying spree. AT&T has scoured Europe for potential acquisitions this year and is likely to take a close look at Vodafone Group (NYSE: VOD), after Vodafone sells its 45 percent stake in Verizon Wireless (NYSE: VZ) back to Verizon. Vodafone and Verizon are said to be discussing a price of about $130 billion for the stake.

AT&T is interested only in acquiring wireless assets, however. So AT&T isn’t likely to remain keen on Vodafone if Vodafone takes the cash from its Verizon sale and uses it to buy cable or fixed-line businesses. It’s estimated that AT&T would be willing to pay around $124 billion for the post-sale, streamlined Vodafone.

Elsewhere, the US Federal Communications Commission (FCC) is reviewing AT&T agreements to buy spectrum and subscribers from Atlantic Tele-Network (NSDQ: ATNI) for $780 million, and AT&T’s bid to buy the fifth-largest US mobile carrier, Leap Wireless International (NSDQ: LEAP), for $1.2 billion.

iShares Bond ETFs (MUB and TIP)

Be careful. We advise against putting new money into these two US bond ETFs – ishares Municipal (MUB) and iShares TIPS (TIP). Rising long-term interest rates have caused price drops, and the likelihood is that rates will rise further from current levels. Given this outlook, we advise moving a portion of fixed-income assets into shorter-term bonds, floating-rate funds, and strategic bond funds that can invest in a variety of instruments. For more specifics, see “Time for a Bond Tune-Up” in our June 2013 issue, page 3.

THE FINAL COUNT 

Mosaic (NYSE: MOS)

Still not fertile ground. In the September issue, we advised selling MOS due to the likelihood of falling prices for potash, the company’s major product. Until recently, the price of potash was controlled by two major cartels, one of which started to unravel in August. As a result, we expect potash prices to move lower from current levels, especially exports to China and India. Since Mosaic gets 70 percent of its revenue outside the US, it’s likely to be heavily affected.

Anheuser-Busch InBev (NYSE: BUD)

This BUD’s for you. BUD’s merger with Grupo Modelo boosted its presence in Latin America, one of the fastest-growing beer markets. Adding about $7 billion worth of revenue annually, the combined entity now controls five of the top six most-valuable beer brands worldwide and will produce more than 10.5 billion gallons of beer annually, solidifying its position as the world’s largest brewer.

Over the next five years, BUD’s earnings are expected to rise an average of 12 percent, with earnings per share forecasted to climb 9.9 percent this year and 10.2 percent in 2014. That’s largely due to BUD’s strong presence in emerging markets, where rising incomes continue to drive strong beer consumption, making BUD a solid long-term investment.

Market Vectors Emerging Markets Local Currency Bond (EMLC)

Victim of the dollar. Emerging-market currencies have remained weak against the US dollar. That’s despite the fact that many of these developing economies are in better fiscal shape that the US, sporting low debt-to- GDP ratios, as well as sound monetary policies.

With the US economy continuing to recover, and the likelihood that US interest rates will rise further, there’s little reason to expect the greenback to give up ground now. That’s especially the case if yields on US Treasury bonds continue to tick up and lure money away from riskier, emerging-market assets. This will put further pressure on returns, making this type of ETF an unattractive bet until the US dollar begins to slide.