If you are an investor who can get access to the Latin American region's high quality large cap stocks, you are spoiled for choice at the moment. All three of the major markets - Argentina, Brazil and Mexico - offer some excellent opportunities for investors with scope to hedge out local currency risks.
#1. CMR S.A.B. de C.V. (Mexico)
We start our tour of the region in Mexico, where CMR has published some very good Q2 numbers. It operates restaurants, cafeterias and bars in the country (e.g. Wings, La Destileria and Bistro Chapultepec). Experienced investors in the region may recall it traded previously as Corporación Mexicana de Restaurantes. Growth, value and income factors indicate the a solid management strategy, which is being executed well (see chart below). It measures up well against its peers, with just Grupo Hotelero Santa Fe doing better in the income stakes. CMR looks like a better overall bet than Grupo Hotelero. Shares are well up over the last 12 months and technical indicators are pointing towards more upside action for investors.
Source: BridgeWise
#2. Pampa Energia (Argentina)
It is tough to find a better balance sheet than that boasted by Pampa Energia, which reported on 16 August. The energy company also recently agreed to buy the rest of Rincon de Aranda from Total Austral SA, which it is bartering for its subsidiary Parco Eolico Mario Cebeiro to Total Austral. Pampo Energia is a solid gas play with electricty generating resources, although it also has exposure to hydroelectric power. It is active in the exploration for oil and gas, and operates a high voltage energy transmission network. It is a big scale energy play with a market cap close to $5bn. Its balance sheet metrics appear to signal strong support for positive growth going forward, plus we anticipate higher energy prices globally over the winter.
