Sold 23% of my holdings in IPGP due to the increased risk from the secondary offering announced last week. While the company could invest in their business which has historically high returns on capital I don't know management very well and must trust that they aren't going to waste the secondary proceeds on a value destroying acquisition. I don't know so decided to lighten my position.
The sale was within my Roth IRA so I'm likely to buy the following:
1) MELI - online auctioneer for Latin America with eBay as a 18% shareholder. This area of the world is home to some of the largest increases in middle class (Brazil, Chile, Columbia, Ecuador). Internet penetration is still low (37%) relative to more advanced economies (77% in USA) so growth is ahead. Compared with ebay MELI has plenty of growth ahead in revenue and EPS
2) ARCO - very similar story to MELI as the MCD franchisee for Latin America. This is a play on the Latin America story as well. Very good management that have been with the company for many years. Comp sales increased by double digits and sales increased by 17.7% last year in native currency terms. They continue to invest in store openings so expenses have been high but the opportunity is there.