Look overseas for recession-beating growth
As a common area of interest in recent months with Europe swooning and Chinese growth slowing down, Latin America continues to offer investors an interesting way to invest in a region that’s fairly self-sustaining and insulated from the troubles many other parts of the world are enduring. That’s why today I’d suggest a deeper dive into the Latin American Discovery Fund Inc. (NYSE:LDF).
Unfortunately for the Latin American Discovery Fund Inc. (NYSE:LDF), it’s been lumped in with other commodity-heavy funds in recent months, and investors have thrown in the towel without really digging into its holdings. If you actually took the time to examine this fund, you’d see that a good chunk of its assets are in larger Latin American financial companies (27% of the fund, to be exact). It certainly does have commodities exposure; however, basic materials make up less than 11% of total invested funds.
This is a really well-diversified fund that can derive outperformance from a number of key companies. At the end of May, for instance, oil giant Petrobras was its third-largest holding. When Petrobras reported its latest quarterly results in April, we saw profits fall 17% and imports into the country rise, which is bad news for Petrobras’ future production growth. If you think this would back the Latin American Discovery Fund into a corner, you’d be wrong. The fund also has such winners as cement giant Cemex, which is benefiting in a big way from an improvement in the North American housing market, and Wal-Mart de Mexico, which delivered a 2% increase in sales and a 4% rise in EBITDA in its most recent quarter. There are ample players ready to step up in this portfolio if one or two companies falter.
The yield of 0.4% isn’t incredibly exciting, but this is a nice Latin American hedge possibility if you’re looking for overseas opportunities.
Foolish roundup
This week’s theme is all about following the investment dollars. It’s pretty obvious that midstream pipelines, housing, and overseas emerging markets such as those in Latin America should be attracting big investment dollars for years to come, giving all three stocks the catalyst they need to rebound off their lows.
The article 3 Stocks Near 52-Week Lows Worth Buying originally appeared on Fool.com and is written by Sean Williams.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool recommends Petrobras.
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