Post Number: 1
|Posted on Friday, May 22, 2009 - 2:06 pm: |
Most investors know that the 'B' in BRIC stands for Brazil. But there is another country in South America experiencing growth. Argentina is the second largest country in South America and the eighth largest in the world. From an economic standpoint, the country has come back from 25% unemployment, defaulted government bonds and a 75% devaluation of their peso, which took place in 2002. With economic growth averaging around 9% over the last couple years, it appears that there might be investment opportunities there.
All of the companies discussed below are based in Argentina, and have ADR's [or ADS's] that trade on the New York Stock Exchange.
Investments and Representations Inc., also known as IRSA, also known as Inversiones y Representaciones S.A. (IRS) has the unforgettable stock symbol, IRS! This is a Buenos Aires based-real estate developer which is involved in residential properties, raw land, shopping centers, office buildings, and luxury hotels. It has a P/E of 23 and a P/S of 3.8. Its quarterly earnings growth year over year was up 388%, on a 53% increase in revenues
Telecom Argentina S A (TEO) is another Buenos Aires-based company. It is one of the largest providers of telecommunications services, and the primary company that serves the northern part of Argentina, including half of Buenos Aires. It also provides Internet services, directories publishing, and wireless services in Argentina. It has a forward P/E of 20 and a very high PEG of 20.
Telefonica of Argentina, Inc. (TAR), the other large telephone company in Argentina, provides domestic and international long distance services, public telephone services, and Internet services. Its P/E is a very high 333, with a P/S of 8.88. Its yield calculates out to over 11% but, that can't be relied upon because it is based on the first dividend it has paid in five years. The company has about $800 million in debt with only $96 million in cash.
Transportadora de Gas Del Sur S.A. (TGS) provides natural gas to residential, commercial, and industrial customers in Argentina. It has a P/E of 11 and a P/S of 2.8. Quarterly earnings year over year were down by over 26%.
YPF S.A. (YPF) is involved in the exploration, and production of oil and gas in Argentina. It has a P/E of 11, and a P/S of 2. It pays dividends at least once or twice a year, and its current yield is 9.2%. Its quarterly revenue growth was up slightly, but earnings were down over 45%.
Apco Argentina Inc. (APAGF) is a way of investing in Argentina by investing in a U.S. company. This is a Tulsa Oklahoma-based company that has its primary operations for the exploration, and production of oil and gas located in Argentina. It has a P/E of 17, and a P/S of 11.2. It even pays a yield of 1.6%. It has $50 million in cash and no long term debt.
(Message edited by admin on May 22, 2009)
Post Number: 1858
|Posted on Friday, May 22, 2009 - 3:08 pm: |
Good post. Thank you... and keep the linking off, please.
Post Number: 334
|Posted on Sunday, May 24, 2009 - 7:01 am: |
Thanks, Nick, very interesting
Post Number: 28
|Posted on Saturday, June 27, 2009 - 7:12 pm: |
Thanks Nick, this could be a very interesting new thread.
Though I fear that the possible consequences of the elections and the generally unstable business climate make potential investors hesitant to invest in Argentina at the moment. Things change quickly; I fear the macro-economics in your first para may already a bit dated.
Direct investment in South America is down from previous years and what is available will go in the first place to Brazil, Chili, Uruguay and possibly Peru. But long term you are right of course, Argentina still has enormous potential (if some important 'details' get sorted out properly...).
I am a bit surprised that you have not included Mercadolibre (MELI), the South American E-Bay/Amazon/Craigslist. 09Q1 was a bit disappointing (like everywhere), but the 08 results were excellent: Earnings up by 60%, Profits 160%, debt/eq 0.19, PE is high at 50 (but ok for growth stock) and forward PE 30.
Look forward to your further comments on Argentinian stocks.