Table of Contents

1.  Market Outlook
2.  Macq. Infrastructure (MFD)
3.  Mindray Medical (MR)
4.  Additional Investing Ideas
5.  Investor Trivia -- Activist Shareholders
6.  Featured Topic -- Net Asset Value
7.  Free Investing Resources

Today's Top Stock Picks

A 12.6% Yield and Foreign Exposure Await Investors in this Fund
By investing in utilities and infrastructure stocks throughout the globe, this fund is able to pay out a mouth-watering yield. Read More. . .

Invest in China's Healthcare Industry With Shares of Mindray
The SARS outbreak emphasized the importance of healthcare in China, and this relatively new stock should be a direct beneficiary. Read More. . .

Market Outlook

On Friday, August 17th, an unexpected cut in the Fed's discount rate provided a much-needed boost of confidence for jittery traders. However, it is not the discount rate, but rather the fed funds rate that shapes the economy and influences interest rates for millions of consumers and corporate borrowers. Still, the surprising move received a warm welcome on Wall Street and helped quiet the tumultuous trading that has characterized the market over the past month.

Given the potential ripple effect of a credit crunch on the broader economy, Wall Street has been coaxing the Fed into deploying every weapon in its arsenal to keep money flowing in the proper channels. And some have interpreted the recent cut in the discount rate as a precursor of a more accommodative Fed policy going forward -- the perfect medicine to heal an ailing market.

For now, the move's desired effect of easing a possible credit crunch appears to be working. Last Wednesday, the nation's four largest banks stepped up to the Fed's discount window to borrow $500 million each. Meanwhile, there was also a flurry of takeover news, an encouraging sign to those worried that merger and acquisition activity was drying up. That promising combination of events gave renewed optimism to nervous traders and sent stocks soaring.

For the week, the Dow Jones Industrials picked up nearly 300 points to rally +2.3%. The Nasdaq and S&P 500 both logged similar recoveries and finished with their biggest weekly gains since March.

While this rally could quickly unravel, it is heartening to see the market sidestep further turmoil (such as layoffs) from the subprime mortgage sector -- news that might have caused shockwaves not long ago. With the market growing more desensitized to this particular concern, investors can perhaps shift their focus to other economic indicators. And there will be plenty of those in the week ahead: existing home sales data, a preliminary GDP report, a closely-watched inflation gauge, and the minutes from the Fed's last meeting.

For now, the mood is considerably brighter on Wall Street -- not to mention other exchanges around the world. Still, for those worried about another global pullback, we have just the solution. Below, I explore the nuts and bolts of the Macquarie/FT Global Infrastructure Utilities Fund (NYSE: MFD, $25.53), whose attractive 12.6% yield has helped it handily outperform the broader market.

Also in this issue, Paul Goodwin, editor of the Cabot China and Emerging Markets Report, shares some thoughts on Mindray Medical (NYSE: MR, $34.03). This little-known Chinese medical equipment maker has already rewarded shareholders by more than doubling since its IPO last September -- and Paul explains why this could be just the beginning for this well-positioned firm.  

Good Investing!

-- Nathan Slaughter
Co-Editor
TopStockAnalysts Digest

Macquarie/FT Global Infrastructure Utilities (NYSE: MFD, $25.53) -- Just about everybody has to write checks to their utility providers every month. Rain or shine, power companies, water companies, and others receive a steady stream of income that is often regulated and protected by the government.

No wonder utility companies were once referred to as "widow and orphan" stocks -- after all, their safety and stability meant even those with very little money could invest in utilities and still have peace of mind. Deregulation of certain markets has changed things somewhat, but many of these firms still enjoy stable revenues and offer hefty dividend yields. The same can also be said of many infrastructure-related companies, such as airport operators or natural gas pipelines.

Australia-based Macquarie Bank is a specialist in this area, managing billions of dollars in infrastructure assets around the world -- including MFD.

As the name implies, this fund targets common stocks and other securities issued by utilities and infrastructure companies around the world. About three-fourths of its assets are sunk into a relatively concentrated portfolio containing a few dozen carefully selected stocks. Top holdings include U.K. water provider United Utilities and New Zealand's Auckland International Airport, as well as oil and gas master limited partnerships like Magellan Midstream Partners (NYSE: MMP).

The remainder of the portfolio is invested in a basket of senior floating rate loans. Because the rates on these loans are variable and reset periodically, their yields will climb in tandem with rising short-term interest rates. This tends to protect the portfolio from rising rates. By contrast, many other closed-end funds have seen their investment income squeezed by rising borrowing costs.

And over time, the fund's experienced management team has more than earned its keep. As of the last semi-annual report on May 31st, MFD had racked up market-beating gains of +28.1% over the prior six-months -- sporting just one losing pick during that period, and only a modest -0.6% loss at that. And over the past three years, the fund has posted impressive annualized gains of nearly +25%. That's not only more than double the return of the S&P 500, it's also good enough to rank the fund #1 among all utility sector funds.

Overall, those looking for some stability in this turbulent market might want to consider MFD. The fund offers exposure to a broad range of gas, water, and electric utilities, power generators, pipeline owners, and transportation infrastructure firms cherry-picked from developed nations throughout the world. And since inception in 2004, the fund has delivered positive NAV returns in 12 of 13 quarters.

Shareholders enjoy robust annual distributions of $1.70 per year, and long-term capital gains payments add even more to MFD's yield. Better still, the fund is also attractively priced -- trading at a steep -8% discount to the value of its underlying portfolio assets.

And looking ahead, there are plenty of reasons to be optimistic. An expanding global economy should lead to steady demand for the products and services of companies tied to key infrastructure. And the recent trend towards increased privatization of infrastructure assets also bodes well.

China has the longest string of double-digit growth years on the planet, and that's a powerful engine. Russia, India, and Brazil are also growing strongly, but China will probably be the "Big Dog" for the foreseeable future. Even with the unpredictability of its government and the volatility caused by so much hot money (foreign and domestic) chasing stocks around, the opportunities in China are still huge.

There's one China stock in particular that I've had my eye on. It's a medical equipment company that came public just last September. It is liquid, pays a small dividend, and reported after-tax profits of nearly 30% last quarter. Plus, it has one of the best company names I?ve ever heard.

The company is Mindray Medical (NYSE: MR, $34.03), a Chinese maker of medical devices that designs and manufactures 40 products, including patient monitoring devices, diagnostic laboratory instruments, and ultrasound imaging systems. The stock came public just last September and has already more than doubled. But there's a deeper story here.

According to the Chinese government's Ministry of Health, in 2005 there were about 18,700 hospitals and 41,700 healthcare clinics in China. In 2002, the latest year for which figures are available, these hospitals bought 85% to 90% of their medical equipment from manufacturers outside China. And finally, the increasing urbanization of China and the outbreak of SARS in 2003 have brought it home that healthcare in China needs an immediate focus on quality and quantity of care.

These statistics help to paint a picture of a country with enormous potential as a market for medical equipment. And Mindray is in the right place with the right products.

A look at Mindray?s chart shows a stock that came public at 14 and moved smartly up the chart to 27 in less than three months. But at that point, MR stalled out. Partly this was due to a need to digest post-IPO gains. And partly it was because Mindray's business has a seasonal swing to it. With the profitable fourth quarter (traditionally its strongest) on the books, and the weaker first quarter in view; investors were a little shy about putting their money down.

But it's the early investor that gets the worm, and MR's small-but-growing roster of institutional sponsors shows that some big investors are ready to take the chance. This one will bear watching, and when it gets organized for another advance, it could be a very profitable stock to have around.