{"id":26169,"date":"2011-12-23T07:48:06","date_gmt":"2011-12-23T12:48:06","guid":{"rendered":"http:\/\/countingpips.com\/fx\/2011\/12\/23\/charles-sizemores-top-pick-for-2012-turkcell\/"},"modified":"2011-12-23T07:48:06","modified_gmt":"2011-12-23T12:48:06","slug":"charles-sizemores-top-pick-for-2012-turkcell","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/12\/23\/charles-sizemores-top-pick-for-2012-turkcell\/","title":{"rendered":"Charles Sizemore\u2019s Top Pick For 2012: Turkcell"},"content":{"rendered":"

By The Sizemore Letter<\/a><\/p>\n

\"\"<\/a>Turkcell is Charles Sizemore’s recommendation for InvestorPlace’s “10 Stocks for 2012.”\u00a0 For more details and to view the other picks for the year, follow this link: 10 Stocks for 2012<\/a><\/strong><\/em><\/p>\n

Before falling to the Turks in 1453, Constantinople was known as the Queen of Cities across Europe and the Middle East.\u00a0\u00a0 No other city in the world could match its culture, sophistication and economic development.\u00a0 The city sat at the intersection of the Mediterranean and the Black Sea, the West and the East, Europe and Asia.\u00a0 It was the axis around which the known world spun.<\/p>\n

Modern Istanbul lacks the economic clout of a New York, London, or Hong Kong\u2014for now.\u00a0 But as it did in its former days of grandeur, Turkey finds itself at the center of several very powerful forces.\u00a0 It is the bridge between a wealthy but economically distressed Europe and a poor but growing Middle East.\u00a0 It is a European country with a customs agreement with the European Union; but it is also an emerging economic and political leader in the Islamic world.\u00a0 And while much of the Islamic world\u2014and non-Muslim developing countries like Russia and China\u2014is still struggling through the unstable transition from autocracy to democracy, Turkey is a good 20 years ahead of most of the pack.<\/p>\n

The \u201cBRICS\u201d of Brazil, Russia, India and China may get most of the press, but Turkey has one of the brightest futures among emerging market contenders.\u00a0 Turkey has a younger population than any of the BRICS save India, yet fertility rates have recently fallen to Western levels; this puts the country in a demographic sweet spot for falling inflation and rising real consumer spending growth for decades to come.<\/p>\n

Of course, the downside to being at the crossroads of Europe and the Middle East is that Turkey finds itself sandwiched between the two most problematic regions of the world. Europe is struggling to contain its sovereign debt crisis, and the Middle East has been wracked by social revolution and the threat of war against Iran.<\/p>\n

Not surprisingly, Turkish stocks have taken a beating.\u00a0 The MSCI Turkey Index is down nearly 50 percent since October of last year.<\/p>\n

If you believe, as I do, that Turkey has one of the brightest futures of any country on the planet, then the crises on Turkey\u2019s borders should be viewed as a phenomenal opportunity to buy shares of some of Turkey\u2019s finest companies.\u00a0 And my choice for 2012 is mobile phone operator Turkcell Iletisim Hizmetleri AS (NYSE: $<\/span>TKC<\/a>)<\/strong>.<\/p>\n

\"\"<\/a><\/p>\n

Figure 1: Turkcell (NYSE: TKC)<\/p>\n<\/div>\n

It\u2019s been a rough year for Turkcell shareholders.\u00a0 Actually, it\u2019s been a rough several<\/em> years.\u00a0 The share price is barely a third of its pre-crisis level, and earlier this year it came close to falling below <\/em>its 2008 meltdown lows.\u00a0 Investors fleeing the volatility of Europe and the Middle East have had little use for a Turkish bluechip like Turkcell.<\/p>\n

\"\"<\/a>Their loss is our gain.\u00a0 There is no object more essential to life in the modern world than the mobile phone, and Turkcell is the dominant wireless carrier in Turkey with a 54 percent market share.\u00a0 And while mobile phones are ubiquitous in Turkey, the overall market is far from saturated.\u00a0 Market penetration is at about 2\/3 of the European average.\u00a0 And smart phones\u2014with their lucrative data plans\u2014represent only 10% of Turkish cell phone users.<\/p>\n

Turkey, while the biggest, is far from Turkcell\u2019s only market.\u00a0 The company is also a major player across Eastern Europe and the Middle East, and Turkcell is the market leader in five of the nine countries in which it operates.\u00a0 The key to take away from this is that telephony is still a growth industry in most emerging markets, and Turkcell is a fine company in a great position to profit from that growth.<\/p>\n

In Turkcell, we have:<\/p>\n