Davos Elites See Opportunity in Latin America and Africa: Wal-Mart Stores, Inc. (WMT), Fastenal Company (FAST)

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Part of the company’s competitive advantage is the size and scope of its store base and distribution system in a highly fragmented market, something that it should be able to replicate internationally. Indeed, while it’s hard to describe the company’s business of selling such things as nuts and bolts as “sexy,” it is a pretty reliable business. The company currently has 36 stores in Mexico, with a focus on major city centers. If the company’s expansion efforts in the United States is a guide, there’s plenty of growth ahead in Mexico, and likely other Latin American countries, for this industry leader.

Eni SpA (ADR) (NYSE:E)

Perhaps the most distinguishing feature of ENI is its solid relationships with countries that are typically considered difficult to deal with. This is particularly true with regard to Africa and the Middle East. Hailing from Italy gives the international oil giant a proximity benefit that competitors don’t enjoy, but location is only part of the equation. Management has gone to great lengths to ensure ENI’s access to reserves in these countries. In fact, the company is one of the biggest players in Africa.

If Africa “takes off” ENI’s results will probably see a positive impact, if for no other reason than working in the countries will be easier. Moreover, as nations develop, ENI will have a first-mover advantage in signing new contracts. The Italian government has a large stake in the company, potentially biasing management away from shareholder friendly activities, which should be a concern, and lagging operations outside of its core business appear to be dragging down overall results. Still, those seeking exposure to Africa would be well served by looking at the relatively high-yielding international oil giant.

Play it Safe

While it’s nice for the rich and famous to talk about the next hot places to invest, it’s sometimes hard for the regular investor to translate that into an investment approach. This time around, however, there are some pretty low-risk ways to get exposure to the luminaries’ best ideas.

Yours,

The article Davos Elites See Opportunity in Latin America and Africa originally appeared on Fool.com and is written by Reuben Gregg Brewer.

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