Central European
Distribution (CEDC) has
Delivered +240% Total Returns
Published: August 25, 2008
When it comes to online search
and advertising, most of us naturally think of Google (Nasdaq:
GOOG). In the computer software industry, Microsoft (Nasdaq:
MSFT) towers above the competition. And then there's Apple
(Nasdaq: APPL), which exerts a tight stranglehold on the growing
digital music realm.
Where am I going with all of
this?
Only that companies such as
these have become so dominant in their respective markets that
dislodging them from the top spot seems an almost impossible
task. These powerful firms have built unassailable market share
leads and repeatedly thwarted the incursions of rivals
attempting to go on the offensive. And today, they enjoy some of
the most impenetrable competitive advantages this side of the
Sherman Antitrust Act.
Not coincidentally,
investors that recognized their potential and got in early have
made a fortune over the years.
With all this in mind,
Market Advisor editor Paul Tracy set out on a quest
in his August 2006 newsletter to identify a select group of
companies that were gobbling up market share and crowding out
competitors. And it was that search that led readers to the
doorstep of Central European
Distribution (Nasdaq: CEDC, $64.41).
A decade ago, the liquor
distribution business in Poland was a highly fragmented market
with dozens of tiny players each controlling their own small
region. But CEDC went on a buying spree, assuming control of
many of these small outfits and quickly assimilating their
operations. Over time, it built a powerhouse distribution
network and began to have more negotiating clout with foreign
distillers.
At the time of Paul's
report, the company was also making inroads into other European
markets like Hungary and had even begun producing and exporting
its own brands of vodka. And today, the company serves a base of
nearly 40,000 customers and takes in over $1 billion in annual
sales.
Meanwhile, CEDC shares have
climbed from $24.05 to Friday's close above $64. And since it
was first added to Paul's "Beat the S&P" Portfolio in 2004, the
stock has zoomed an impressive +240%.
In this month's issue, Paul
sheds some light on another foreign company that, like CEDC, has
carved out a large share of a healthy, growing market. The firm
has 40 million customers in Russia and plenty more in
neighboring countries like Kazakhstan and the Ukraine -- and
with many subscribers signing up for premium services, average
revenues per customer have jumped more than +20% over the past
year.
To learn more about this
exciting company, which is expanding rapidly throughout
eastern Europe, we invite you to try out our
Market Advisor newsletter. Simply follow
this link to learn more.
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Nathan Slaughter
StreetAuthority Staff Writer
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