Merrill's Landers Likes Latin Stocks

The other hot story coming out of Latin America recently is the fight between Argentina's government and Shell(SC Quote - Cramer on SC - Stock Picks).

It's a bit of a tug of war. Prices were frozen in place for gasoline and energy in Argentina when they were attempting to pacify the economy. And now that the debt restructuring is more or less over, the energy companies are trying to play catch-up in terms of prices. But the government is fighting the energy companies, saying that they have not unfrozen the prices and they can't be raised yet.

Argentina is in a bind because it has high unemployment and a big portion of its middle class has fallen in stature. The reason why things have not gotten any worse is due to price controls. It's totally a political call now. The news flow has not been positive at all.

Latin America was a huge performer last year and is still outpacing the U.S. indices. What should we expect from here?

At the start of the year, I was looking for a 15% to 20% return for the funds we manage in Latin America. And I stick with that. Valuations are still attractive and -- despite this week when some investors got nervous -- fund flows have been positive. Brazil is especially undervalued here since it is trading at a P/E of 8 and has earnings growth north of 20% for this year. And in Mexico, some stocks look good.

I'd say hang in there, because over the last five years, on an annual basis, Latin America has been one of the best regions to invest in, and there is still good value out there.

« Previous Page

1 2 3 4

Next Page »