Global Q&A: Still a believer in growth

Q. Vahan, although you primarily recommend US equities, your newsletter also includes a few international picks, such as American Oriental Bioengineering (NYSE: AOB) and Embraer (NYSE: ERJ). What factors made you choose these companies?

A. I do recommend foreign companies from time to time in the Forbes Growth Investor, but only if they trade on US exchanges and only if they show up at the top of my screens. I rely on a quantitative model that screens stocks based on the probability of out-performance over the next six to 18 months. I like AOB because it sells traditional Chinese plant-based pharmaceuticals in China. Demand is very strong for these natural products in that country. I like ERJ because it gives us exposure to Brazil, which has one the fastest growing economies in Latin America.

Q. Several of your recommendations are US-based multinationals, such as RPM (NYSE: RPM) and Amdocs (NYSE: DOX), both of whom do significant business around the world. How important was their international exposure to your selection, and why?

A: International exposure is not something I normally focus on. Besides, these days most mid- to large-sized companies have at least some international exposure. Because the global economic outlook is so uncertain at this time, I felt more comfortable with companies that have a diversified revenue stream.

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