Welcome to Episode #38 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
In this episode, Tracey is joined by John Blank, Zacks Chief Equity Strategist and Editor of the International Trader, which specializes in buying international stocks.
Both Tracey and John are big fans of Mexico and Colombia, but with the chaos in the emerging market stocks, especially those impacted by the plunge in crude, should you be investing there?
Tracey and John discuss 3 ways to get into the game in both of these countries:
1. Buy Mexican and Colombian company stocks
The problem with this strategy is that there are only so many companies that trade on the US exchanges. Mexico has more options, including FEMSA (FMX), which owns the largest Coca-Cola bottler in Latin America and the OXXO convenience store chain, and American Movil (AMX), Carlos Slim's telecom giant.
For a companies a little outside the box, but which are cashing in on the growing Mexican middle class as well as the international traveler, consider Grupo Aeroporturio del Sureste, aka ASUR (ASR), which operates a bunch of airports including the rapidly expanding Cancun and Cozumel airports. Another option for airports is Grupo Aeroporturio del Pacifico, aka GAP (PAC) which operates Los Cabos, which saw a record load factor of 87.5% in May, Puerto Vallarta and Guadalajara, which saw domestic traffic soar 19.4% in May, among other airports.
In Colombia, investors options are more limited. Bancolombia (CIB) is the country's largest bank.
It is expected to grow earnings by 3.4% this year and another 14.5% next year but some analysts are worried about bad loans associated with the commodities sector.
2. Buy country ETFs
The easiest way to get Mexican and Colombian exposure is by simply buying their ETFs.
iShares Mexico ETF (EWW) will get you a bunch of consumer names including America Movil and FEMSA, along with Walmart-Mexico and Grupo Bimbo, the world's largest baking company.
Global MSCI Colombia ETF (GXG) is weighted more heavily towards typical emerging market industries such as energy, power generation and banks. Its largest holding is Bancolombia at 15%.
3. Buy American companies doing business in Mexico and Colombia
John and Tracey discuss ways in which investors can tap into the growth in Mexico and Colombia by buying US companies doing business there.
Home Depot, Williams-Sonoma and Old Navy, which is owned by Gap, are just a few that have been growing their retail presence in Mexico.
Starbucks entered into the Colombian market in 2014 and already has 6 cafes in Bogota.
But what else should you know about Mexico and Colombia before investing in their future? Tune into this week's podcast to find out.
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Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.
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FOMENTO ECO-ADR (FMX): Free Stock Analysis Report
AMER MOVIL-ADR (AMX): Free Stock Analysis Report
GLBL-X/F COL 20 (GXG): ETF Research Reports
BANCOLOMBIA-ADR (CIB): Free Stock Analysis Report
ISHARS-MEXICO (EWW): ETF Research Reports
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