Oportunidades de inversion en Cuba

Investing In Cuba: 'Untapped Opportunity'

By: TheStockAdvisors.com   Friday, October 29, 2010 1:36 PM

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As soon as it is possible to do so, several North American companies are likely to move quickly to enter Cuba, the greatest untapped opportunity remaining in the western hemisphere.

Below, we look at the best investment opportunities for investing in Cuba, should such a change occur.

In August, Raul Castro announced that 500,000 public workers in Cuba will be laid off and will need to find jobs in newly-legalized small private enterprises.

Allowing the formation of private companies was the last barrier needed to be removed before Cuba could open its door to foreign investment and ownership of businesses.

The next hurdle is getting US approval for American companies to enter Cuba. In my view, the Obama administration is clearly moving in that direction.

For the broadest selection of the leading players that could benefit from such a development, I continue to recommends the Herzfeld Caribbean Basin Fund (CUBA).

Its recent performance looks good and I think the fund will do well when Cuba opens its doors to Yankee capitalists.

For a more focused investment, several large companies are in line to profit from a more business-friendly Cuba.

Indeed, I think your best strategy is to choose companies that are already doing well without a Cuba connection. If Cuba opens up, as I expect, it will be a nice bonus. If not, you will still have a good investment.

If you can buy only one stock, I recommend Imperial Sugar (IPSU). The company was an important contributor to Cuba's economy before the revolution.

It would make sense for the Castro regime to give the company's property back to restore Cuba's multi-million sugar industry.

I think the stock is undervalued. Sugar prices are rising and the company should do well.

If you buy two stocks, I suggest the cruise line operator, Royal Caribbean (RCL: 39.55, -0.42). For several years, one of the company's subsidiaries regularly took tourists to Cuba.

Of course, the US embargo terminated that business. When the embargo ends, these voyages will resume.

I also think Cuba will be a hot destination for tourists. Thousands of Americas each year already visit the country despite the US embargo. Meanwhile, RCL is doing well despite the recession.

Other stocks to consider would be American Movil (AMX: 57.27, 0.13),, the Mexico-baesd wireless giant and Atlantic Tele-Network (ATNI: 42.24, -7.1), a Caribbean wireless and landline provider.

We would also look to Consolidated Water (CWCO: 10.2, 0.75), a Caribbean desalinization and water distributor and Petrobras (PZE: 17.98, -0.02), the Brazilian oil giant that is already doing business in Cuba.

Other companies to consider are Starwood Hotels (HOT: 54.14, -1.03), which owns rights to Cuban hotels seized by Castro, and Trailer Bridge (TRBR: 3.15, 0.1), a Florida-based firm that ships to the Caribbean.

Finally, we would look at Vulcan Materials (VMC: 36.55, 0.29), a Florida-based cement and aggregates producer, and Watsco (WSO: 55.97, 1.15), a Florida-based refrigeration and air conditioner maker.