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Beverages in Patagonia, Two ETFs for Argentina

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Trading Argentina: Beverages

Brazil's brewing giant AmBev does a lot of business in Argentina. Arguably, this stock is one of the best ways to get exposure to the extremely sophisticated Argentine middle class.

ABV trades like a large-cap blend stock in U.S. terms.

ABV seems expensive with a PEG value of 1.8047, well above the alcoholic beverage industry's median of 1.59. Furthermore, the company trades at a premium PE of 23.28 versus the industry median of 18.55.

It is true that ABV converts a larger percentage of its revenue to profits than most other companies in its space. Operating margin is 38.26%!

ABV has a debt to total capital ratio of 22.08% -- in line with the industry norm. With an interest coverage ratio of 21.56 and a Quick ratio of 1.12 the company should be able to comfortably repay its debt.

Short interest is only 1.75% and institutional investors hold 16.82% of the float.

Bottom line: ABV seems to be priced for perfection and it sitting on the inner trend line.

Two ETFs for Argentina

While there is no pure ETF play for Argentina, there are at least two that offer various blends of stocks from Argentina, Brazil, Chile, China and others: PIE and ILF.

The iShares S&P Latin America 40 Index Fund (ILF ) reflects results that correspond closely to the performance, before fees and expenses, of the S&P Latin America 40 index.

The fund typically invests at least 90% of assets in securities of the underlying index and in depositary receipts representing securities of the underlying index. The underlying index is comprised of selected equities trading on the exchanges of five Latin American countries.

The ETF includes highly-liquid securities from major economic sectors of the Mexican and South American equity markets. The fund is non-diversified.

The PowerShares DWA Emerging Markets Technical Leaders fund (PIE ) generally reflects price and yield performance of the index called the Dorsey Wright Emerging Markets Technical Leaders index.

The fund typically invests at least 90% of total assets in the stocks that comprise the underlying indexes, ADRs and GDRs based on the stocks in the underlying index.

It invests at least 80% of total assets in securities of emerging economies within Dorsey Wright & Associates' classification definition, excluding companies listed on a U.S. stock exchange. The fund is non-diversified and options are not available for this security.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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