In the first quarter of fiscal 2013, it grew revenue by 6.0% year-on-year to $976.9 million, but registered a net loss of $6.6 million as a result of lower operating income and higher non-operating charges related to the devaluation of Venezuela’s currency, the bolivar. The problems in Venezuela are telling of emerging market risks and I am concerned that Arcos Dorados generates more than two-thirds of its EBITDA from Brazil, making it vulnerable to any weakening of consumer sentiment in the country.
Banco Latinoamericano Comerc Exterior SA (NYSE:BLX) is a proxy for Latin American growth and its conservative risk management strategy limits downside. At 1.0 times P/B and a 7.9 times forward P/E, Bladex is attractively valued. Including a 5.4% forward dividend yield to the equation, investing in Bladex is a no-brainer.
Mark Lin has no position in any stocks mentioned. The Motley Fool owns shares of Arcos Dorados and Bladex.
The article Is This the Best Way to Play Latin American Growth? originally appeared on Fool.com.
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