Why Bill Gates Put $155 Million Into Extreme Hot Stocks To Buy Now

Wed, Dec 4, 2013

Bill Gates is making a big  Contrarian Investment.

how to buy commodity stocksRecently the Microsoft Founder Bill Gates Put $155 Million Into An Investment  so beaten up, yet packed with so much capital appreciation potential, only a true contrarian investor could love.

He put his big bet on Spain. More specifically, real estate in Spain.

Investing in Spain certainly a contrarian investment. Two years ago Spain was one of the most problem-plagued countries threatening to destroy the entire Eurozone economy.

The reason, as it was with so many national economies, was housing.

But Bill Gates and his advisors are spotting a major investment opportunity in Spanish hot stocks to buy right now 2013.

Gates invested $155 million to buy a 6% stake in Fomento de Construcciones & Contratas (FCC), a Spanish infrastructure company.

FCC shares have been hit extremely hard during the five-year economic slide in Spain.

Gates isn’t the only one seeing a big opportunity in Spain. The country is attracting significant inflows of foreign capital. Last year Spain attracted $28 billion in direct foreign investment. To put that amount in perspective, it’s more than France or India.

The timing shouldn’t be too surprising to contrarian investors (or Contrarian Insights readers) who have been early into the rebound in European hot stocks to buy now  which began a few months ago.

how to buy stocks in commodities

The problem was housing and real estate.

The tables below show how bad European real estate got and how Spain is moving from terrible to bad. This is exactly what contrarian investors want to see and creates and Hot Stock To Buy Right Now 2013.

 

The Ten Worst European Housing Markets Over The Last Five Years Are:

1

It’s clear Spain has had a tough run of it over the last five years.

After five years and an 18% decline in the average housing price though, however, it’s hardly hit bottom.

 

In The Last Year Spanish Real Estate Has Posted One Of Its Worst Years Yet:

2

Spanish real estate is still doing exceptionally poorly. But there are finally some encouraging signs for Spanish real estate.

The most positive indicator the end is near is that the Spanish real estate construction industry hit rock bottom.

The oversupply of homes had to be corrected. The only way to correct it was for the market to eliminate construction of new homes until the oversupply was worked off.

The chart below shows the housing starts and completions plummeted almost down to more than 90% to about 80,000 per year:

That chart looks disastrous. But it was essential for the Spain’s housing market to bottom out. It was also critical to go through that correction for current recovery to begin.

The table below shows the rankings of the price to rent ratios (the best indicator of whether real estate is overvalued or undervalued) from around the world:

 

4

Spain is right in the middle of the chart. At the height of the bubble it was much more overvalued. Now it’s in a decent spot.

In the end, everything is in place for Spain to make a major economic rebound.

The best hot stock to buy right now 201 3to ride the Spain rebound are the handful of Spanish companies listed in the United States:

iShares MSCI Spain Capped (EWP)
Banco Santander (SAN)
Telefonica (TEF)
Grifols (GFRS)
Banco Bilbao Vizcaya Argentaria (BBVA)

All of these should benefit greatly from a recovery in Spain’s economy.

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