To OTC Journal Members:
 
 

Tap the Second-Fastest Growing Economy in the World with My Latest Idea

It's hard to believe, but a little more than six years ago the China-investment craze wasn't even a glimmer in someone's eye. It wasn't until the middle of 2007 that the hysteria began, after the bulk of the rally had been made. 

As an example, the iShares FTSE China 25 Index Fund (FXI) rallied 150% between the end of 2004 and the middle of 2007, yet it wasn't until mid-2007 the outright craze started, marked by a reckless flurry of Chinese IPOs around that time, and a marketwide P/E of 45.

Oh sure, China's equity market rallied another 70% in the last half of 2007, gathering the last of the late-comers on the way up. The smart money, however, had already reaped their big gains from trades they took on a couple of years earlier. These folks were actually selling their Chinese stocks into the last bullish wave of that bull market (and it's a good thing they did too, before FXI tanked in 2008).

The moral of the story? If you wait until a trend becomes obvious -- or if you wait for a story to become mainstream -- you've already missed the boat and set yourself up for a truckload of regret. The big money is won by folks with enough guts to get into budding trends before the majority of the market even hears about them. 

So where's the next China-like hot spot that nobody see coming? Better still, what is the best way to play this emerging trend? 

The answer to the first question is Turkey. The answer to the second question is TurkPower Corporation (TRKP), which finds itself at the center of the second-fastest growing energy market in the world.

Ridiculous? Yeah, well, a lot of people were saying something similar about Chinese stocks in 2005 only to end up eating crow in 2007 when they missed out on a triple-digit opportunity. So, rather kicking yourself a couple years from now with a "coulda shoulda woulda" speech, we suggest investing just a couple of minutes to see why TurkPower is a shining star of the next China-like growth wave.
 

Who They Are/What They Do

TurkPower Corporation is self-described as a "Turkish-American consulting and service operations firm with its sole focus set on the booming Turkish energy market. TPC offers its domestic and international clients consulting services and acts as a full service operator for wind, hydro, solar and geothermal energy parks in Turkey."

The description is technically accurate, but doesn't do the company justice. TurkPower is quite literally a link between would-be power plants, Turkish regulatory bodies, and new investors... and they're quickly proving to be indispensable to their clients. 

The company makes money in three key ways:

• Consulting: Building a power plant requires more than just constructing the facility. There's a mountain of red tape and licensing to work through, and a ton of logistical work that needs to be done to ensure a plant's longevity. TurkPower offers help on those fronts.
• Operation: The company not only has the expertise to get electricity-generating facilities built, but also to run them on an ongoing basis.
• Placement: Above all else right now, Turkey needs more energy-creation capacity, and needs investors to make it happen. TurkPower represents these planned facilities in an agent's capacity, connecting investors and the power plant's builders/operators. For this work, the company gets a very nice percentage of the deal's proceeds.

Numbers Don't Lie

At the heart of this incredible energy opportunity in Turkey is massive growth of the country's economy. Here are some of the numerical highlights most investors just don't realize (though as time goes on the word will spread, as it did with China starting six years ago)...

• 6.5% yoy GDP growth last quarter, following 10.2% yoy GDP growth in the quarter before that one: Turkey is one of the fastest-growing economies in the world, and is expected to grow at an annualized rate of 6.7% through 2017. That's stronger than any other European country's comparable forecast.
• 30% increase in energy demand: As of right now, Turkey just doesn't have enough plants to power its modern-day industrial revolution. It will need to increase its electricity production capacity by about 30% (12,000 MW) by 2020 to sustain its growth.
• $130 billion: This is the amount of investment the country is expecting to see flow into its energy infrastructure over the next ten years.

Even Better

As powerful as those reasons are in and of themselves, there are three more reasons to add to the list of why you'd want to invest in this unsung growth opportunity today.

The first one is simply that though TurkPower is a young company, in just the last few months it's already lined up several deals that should translate into several million in revenue... and the energy market's growth is just starting to swell in Turkey. Think of the kind of growth we could see once the trend starts to accelerate. TurkPower could be doing tens of millions in revenue on an annual basis. 

Second, though TRKP got off to a volatile start when it first started trading back in May, we've seen the volatility reigned in since then, with a converging wedge shape forming as a result. As we approach the tip of the triangle, the stock's going to get squeezed and squeezed until one side of the wedge is broken. Given the strength of the buying volume over the last three months, odds are we'll see a bullish move out of the formation. 

Finally - and this may be the biggest yet most ambiguous reason of all - there's not going to be a lot of room in this trade, or in many Turkish-based trades for that matter. 

Though Turkey's is the 17^th largest economy in the world, and one of the fastest growing, this isn't going to be like China where there were plenty of stocks available for anybody who wanted to step in. See, China's is the second-biggest economy in the world. Turkey's economy is growing, but as only the 17^th biggest, there won't be limitless opportunities to invest in the country's growth at palatable prices. Either you're in soon, or you're just an observer looking through the window wishing you had gotten in.

Bottom line - The best time to own Chinese stocks was way back in 2005 before anybody was thinking about it. Likewise, the best time to own TRKP is today before the rest of the market starts crunching the numbers and this growth story becomes en vogue. The parallels are uncanny.