This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

Investing in a Post-Fidel Cuba

For decades, corporate America has been hoping that Fidel Castro's departure would bring an end to the trade embargo, opening the country to U.S. investment.

Almost six months after the Cuban leader stepped aside, temporarily handing over the reins to his brother, there are no signs of a transition to democracy or a market economy. But a tiny closed-end mutual fund run out of Miami is already cashing in. The $14 million Herzfeld (CUBA)Caribbean Basin Fund (CUBA) invests at least 80% of its assets in companies that derive substantial revenue from operations in the Caribbean region.

"We are invested in companies that are doing well now, that will continue to do well, and will get significant new business if the embargo is lifted," says Thomas J. Herzfeld, president and chairman of the fund's eponymous adviser.

The Caribbean Basin Fund's share price has more than doubled since Castro fell ill this summer. Over the 12 months ended Jan. 18, it has returned 135%, making it the highest-returning closed-end fund over the past year, according to the Closed End Fund Association.

The fund is not exactly a pure play on Cuba, since the embargo prevents any U.S. company from investing directly in the island nation. But Herzfeld says each of the companies it's invested in has the potential to significantly increase its business if the embargo is lifted.

For example, Florida East Coast Industries (FLA), the fund's largest holding at 18.73% of assets, operates 351 miles of freight railroad between Jacksonville and Miami. Herzfeld believes that a large portion of the U.S. freight that would make its way to Cuba if the embargo is lifted would have to use those rails.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs