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Yahoo
7 hours ago
- Business
- Yahoo
Analysis-Investors eye Latin America as they diversify away from Wall Street
By Rodrigo Campos and Carolina Mandl NEW YORK (Reuters) -Latin America has emerged as a top investing destination as ongoing wars - both of the military and trade variety - make investors seek options in a region they view as refreshingly untroubled by tariffs and major conflicts. Portfolio flows data suggests that investors are largely underexposed to Latin America even as many stock markets - including Brazil's and Mexico's - are trading at or near record highs, while sovereign bonds offer still-attractive yields. Although some prefer not to chase a stock rally, others have focused on the local debt market. "The Latam story is easier to tell now as stocks are cheap and there is a lack of options in emerging markets," said Leonard Linnet, head of equities at Itau BBA. "China is at the epicenter of the trade war, India is more expensive and has some geopolitical issues with Pakistan and investors are avoiding investing in Russia.' Brazil and Mexico are the behemoths where most international investors concentrate their exposure to Latin America. Both carry by far the largest regional weights in global benchmarks for stocks and bonds. Among all emerging markets, however, the two countries are relatively small. Brazil, which is Latin America's largest economy and market, constitutes 60% of the MSCI Latam index and just below 5% of the broader EM index. The stock markets of both Brazil and Mexico are trading near record highs and at low valuations, and their bonds offer attractive yields with the backdrop of softening monetary policy. The investment avenues thin out for some institutions as some Latin American markets are comparatively illiquid or lack investment-grade credit ratings. But in that higher-risk environment other investors see returns. "The investment opportunity in Latam does not require large changes in global asset allocations," Rob Citrone, founder of global macro hedge fund Discovery Capital, told his investors recently. "Asset flows, on the margin, dictate much of the price performance, so small changes to large markets, such as the U.S., can have big impacts on smaller markets, such as most in Latam." After a 26% decline in the regional stock index last year, Latam is the best performer for stocks this year. Within the MSCI universe, investors are paying just over $9 for each dollar in earnings across Latam - compared with more than $19 for developed markets. Although Mexico is closer to the trade war's epicenter, its listed companies are not so exposed to it, so the country's stocks are moving higher. "Price-to-earnings multiples in Latam are low now even when compared with its own historical average," said Itau BBA's Linnet. "Brazil is not only cheaper than China and India, it is trading at a 23% discount from (itself)." Netherlands-based Robeco has been increasing allocation to Latin America, mainly to Mexico, Brazil and Chile, as it has partially shifted away from the U.S., said Wim-Hein Pals, head of emerging markets team at Robeco. The firm is overweight Latam, while it is close to neutral China and underweight India. Both dollar weakness and idiosyncratic stories, including last year's FX selloff, have bolstered the region's currencies. With its benchmark interest rate at 14.75%, Brazil's real has emerged as one of the favored global carry currencies and is up 9% against the greenback this year. The Latin America currency index is up nearly 15% this year and last week touched a 14-year high. The outlook for the global economy and the issue of reallocating outside of the United States both face uncertainties and it is far too soon to expect material inflows to Latin America, said Graham Stock, senior emerging market strategist at RBC Global Asset Management. "Having said that, you could always see short-term trades that are dollar-bearish, and you could see some allocation into Latin American currencies, because they're high yielding. The carry is attractive there, and I think that is part of what we've seen." Beyond the region's largest economies, Argentina has been a forbidden fruit of sorts for investors over the past years. Its dollar debt has returned over 100% at the index level since President Javier Milei was elected in late 2023 and the local Argentine stock index rose 173% last year. Yet Argentina remains outside major benchmarks, making the market inaccessible to some of the largest investors - some of whom have grown more curious about Argentine assets since capital controls were all but lifted in mid-April. "We couldn't buy in on Argentina for all practical purposes while they were under the capital controls," said Alison Shimada, head of the Total Emerging Markets Equity team at Allspring Global Investments. "Now that that has changed, we would be interested, and we're doing some work on it, but at the right price." Some investors would like to see more Latam companies listed. Brazil also attracts most of the region's venture capital, with over 1,400 VC-backed startups since 2013 as of the first half of last year, according to the most recent data from LAVCA, while Uruguay, Chile and Colombia emerged as alternative hubs for innovation. Regardless of how many of these startups actually go to market, they will likely find investors thirsty for places to put money to work in the region. Said Allspring's Shimada: "I'd love to see those smaller countries have more listed assets." Sign in to access your portfolio
Yahoo
7 hours ago
- Business
- Yahoo
Analysis-Investors eye Latin America as they diversify away from Wall Street
By Rodrigo Campos and Carolina Mandl NEW YORK (Reuters) -Latin America has emerged as a top investing destination as ongoing wars - both of the military and trade variety - make investors seek options in a region they view as refreshingly untroubled by tariffs and major conflicts. Portfolio flows data suggests that investors are largely underexposed to Latin America even as many stock markets - including Brazil's and Mexico's - are trading at or near record highs, while sovereign bonds offer still-attractive yields. Although some prefer not to chase a stock rally, others have focused on the local debt market. "The Latam story is easier to tell now as stocks are cheap and there is a lack of options in emerging markets," said Leonard Linnet, head of equities at Itau BBA. "China is at the epicenter of the trade war, India is more expensive and has some geopolitical issues with Pakistan and investors are avoiding investing in Russia.' Brazil and Mexico are the behemoths where most international investors concentrate their exposure to Latin America. Both carry by far the largest regional weights in global benchmarks for stocks and bonds. Among all emerging markets, however, the two countries are relatively small. Brazil, which is Latin America's largest economy and market, constitutes 60% of the MSCI Latam index and just below 5% of the broader EM index. The stock markets of both Brazil and Mexico are trading near record highs and at low valuations, and their bonds offer attractive yields with the backdrop of softening monetary policy. The investment avenues thin out for some institutions as some Latin American markets are comparatively illiquid or lack investment-grade credit ratings. But in that higher-risk environment other investors see returns. "The investment opportunity in Latam does not require large changes in global asset allocations," Rob Citrone, founder of global macro hedge fund Discovery Capital, told his investors recently. "Asset flows, on the margin, dictate much of the price performance, so small changes to large markets, such as the U.S., can have big impacts on smaller markets, such as most in Latam." After a 26% decline in the regional stock index last year, Latam is the best performer for stocks this year. Within the MSCI universe, investors are paying just over $9 for each dollar in earnings across Latam - compared with more than $19 for developed markets. Although Mexico is closer to the trade war's epicenter, its listed companies are not so exposed to it, so the country's stocks are moving higher. "Price-to-earnings multiples in Latam are low now even when compared with its own historical average," said Itau BBA's Linnet. "Brazil is not only cheaper than China and India, it is trading at a 23% discount from (itself)." Netherlands-based Robeco has been increasing allocation to Latin America, mainly to Mexico, Brazil and Chile, as it has partially shifted away from the U.S., said Wim-Hein Pals, head of emerging markets team at Robeco. The firm is overweight Latam, while it is close to neutral China and underweight India. Both dollar weakness and idiosyncratic stories, including last year's FX selloff, have bolstered the region's currencies. With its benchmark interest rate at 14.75%, Brazil's real has emerged as one of the favored global carry currencies and is up 9% against the greenback this year. The Latin America currency index is up nearly 15% this year and last week touched a 14-year high. The outlook for the global economy and the issue of reallocating outside of the United States both face uncertainties and it is far too soon to expect material inflows to Latin America, said Graham Stock, senior emerging market strategist at RBC Global Asset Management. "Having said that, you could always see short-term trades that are dollar-bearish, and you could see some allocation into Latin American currencies, because they're high yielding. The carry is attractive there, and I think that is part of what we've seen." Beyond the region's largest economies, Argentina has been a forbidden fruit of sorts for investors over the past years. Its dollar debt has returned over 100% at the index level since President Javier Milei was elected in late 2023 and the local Argentine stock index rose 173% last year. Yet Argentina remains outside major benchmarks, making the market inaccessible to some of the largest investors - some of whom have grown more curious about Argentine assets since capital controls were all but lifted in mid-April. "We couldn't buy in on Argentina for all practical purposes while they were under the capital controls," said Alison Shimada, head of the Total Emerging Markets Equity team at Allspring Global Investments. "Now that that has changed, we would be interested, and we're doing some work on it, but at the right price." Some investors would like to see more Latam companies listed. Brazil also attracts most of the region's venture capital, with over 1,400 VC-backed startups since 2013 as of the first half of last year, according to the most recent data from LAVCA, while Uruguay, Chile and Colombia emerged as alternative hubs for innovation. Regardless of how many of these startups actually go to market, they will likely find investors thirsty for places to put money to work in the region. Said Allspring's Shimada: "I'd love to see those smaller countries have more listed assets." Sign in to access your portfolio
Reuters
14-05-2025
- Business
- Reuters
Discovery's Citrone says America Movil is his top stock name
NEW YORK, May 14 (Reuters) - Discovery Capital's founder Rob Citrone said on Wednesday his favorite stock at this moment is Mexico's America Movil ( opens new tab due to its exposure to many different countries in Latin America. Citrone, who manages a macro hedge fund, is bullish on Latin America as a diversification to investments in the U.S. Discovery posted a 52% gain last year. He sees opportunities in Latin America's equities, rates and currencies. Currently, most of Discovery's bets are outside the U.S.
Yahoo
10-05-2025
- Business
- Yahoo
Pampa Energia (PAM): Among Billionaire Rob Citrone's Small-Cap Stock Picks with Huge Upside Potential
We recently published a list of Billionaire Rob Citrone's 10 Small-Cap Stock Picks with Huge Upside Potential. In this article, we are going to take a look at where Pampa Energia S.A. (NYSE:PAM) stands against Billionaire Rob Citrone's other small-cap stock picks with huge upside potential. Rob Citrone founded Discovery Capital Management in 1999. Based in Connecticut, Discovery Capital is one of the Tiger Cub hedge funds. Rob Citrone worked as a portfolio manager at Fidelity Investments and Julian Robertson's Tiger Management before founding Discovery Capital. Citrone was also a wrestler in high school and today owns a small slice of his favorite football team, the Pittsburgh Steelers. His firm focuses on liquidity, valuation multiples, past and potential growth in picking stocks, and has a focus on technology, services, basic materials, and financial sectors. The last reported 13F filing for Q4 2024 included $1.47 billion in managed 13F securities and a top 10 holdings concentration of 44.09%. Robert Citrone recently cut his long equity portfolio. In his January monthly letter, obtained by the Institutional Investor, the firm halved its net equity exposure to 25% from a peak of 50% just at year-end to go flat to short in developed markets. He has been expecting a stock market correction of 5% to 7%. He believes it is meaningful enough to reduce risk and potentially be short, even though it's not a large sell-off. Citrone thinks the market is expensive in historical terms, especially relative to interest rates. Still, the majority of global investors are long corporate America, including venture, private equity, private credit, long-only equity, and/or credit long-short hedge funds, even as the US enters tariff uncertainty and no more Fed cuts are anticipated in the near term. To compile the list of billionaire Rob Citrone's 10 small-cap stock picks with huge upside potential, we sifted through the Q4 2024 13F filings of Discovery Capital Management from Insider Monkey. From these filings, we checked the upside potential from CNN for the top 50 stock picks that were trading between $1 billion and $10 billion and ranked the stocks in ascending order of this upside potential. We have also added Discovery Capital Management's stake in each company and the hedge fund sentiment around each stock. Note: All data was sourced on May 8. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here). Modern machinery at an offshore oil platform, symbolizing the importance of exploration and production. Discovery Capital Management's Stake: $13.38 million Number of Hedge Fund Holders: 12 Market Capitalization as of May 8: $3.98 billion Average Upside Potential as of May 8: 27.15% Pampa Energia S.A. (NYSE:PAM) is an integrated power company in Argentina. It operates through Oil & Gas; Generation; Petrochemicals; and Holding, Transportation, & Others segments. It generates electricity through thermal plants, hydroelectric plants, and wind farms with a 5,472 MW installed capacity. It also explores for and produces oil & gas. The company's Upstream Gas Production achieved record gas output in 2024 and marked a 21% year-over-year increase in average production and an 80% increase since 2017. This growth is attributed to the performance of Pampa's wells in Vaca Muerta. In Q4 specifically, gas production rose by 11% year-on-year, with shale gas increasing its share of the total gas production, from 32% in 2023 to ~50% in 2024. While Pampa Energia (NYSE:PAM) is diversifying into shale oil by developing Rincon de Aranda, natural gas from Vaca Muerta continues to be a key revenue generator. JPMorgan recently upgraded the price target on the stock from $59 to $93.5. JPMorgan remains optimistic about Argentina's oil and gas industry and believes there is still room for growth in the area. Overall, PAM ranks 6th on our list of Billionaire Rob Citrone's small-cap stock picks with huge upside potential. While we acknowledge the growth potential of PAM, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than PAM but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
10-05-2025
- Business
- Yahoo
Nebius Group (NBIS): Among Billionaire Rob Citrone's Small-Cap Stock Picks with Huge Upside Potential
We recently published a list of Billionaire Rob Citrone's 10 Small-Cap Stock Picks with Huge Upside Potential. In this article, we are going to take a look at where Nebius Group N.V. (NASDAQ:NBIS) stands against Billionaire Rob Citrone's other small-cap stock picks with huge upside potential. Rob Citrone founded Discovery Capital Management in 1999. Based in Connecticut, Discovery Capital is one of the Tiger Cub hedge funds. Rob Citrone worked as a portfolio manager at Fidelity Investments and Julian Robertson's Tiger Management before founding Discovery Capital. Citrone was also a wrestler in high school and today owns a small slice of his favorite football team, the Pittsburgh Steelers. His firm focuses on liquidity, valuation multiples, past and potential growth in picking stocks, and has a focus on technology, services, basic materials, and financial sectors. The last reported 13F filing for Q4 2024 included $1.47 billion in managed 13F securities and a top 10 holdings concentration of 44.09%. Robert Citrone recently cut his long equity portfolio. In his January monthly letter, obtained by the Institutional Investor, the firm halved its net equity exposure to 25% from a peak of 50% just at year-end to go flat to short in developed markets. He has been expecting a stock market correction of 5% to 7%. He believes it is meaningful enough to reduce risk and potentially be short, even though it's not a large sell-off. Citrone thinks the market is expensive in historical terms, especially relative to interest rates. Still, the majority of global investors are long corporate America, including venture, private equity, private credit, long-only equity, and/or credit long-short hedge funds, even as the US enters tariff uncertainty and no more Fed cuts are anticipated in the near term. To compile the list of billionaire Rob Citrone's 10 small-cap stock picks with huge upside potential, we sifted through the Q4 2024 13F filings of Discovery Capital Management from Insider Monkey. From these filings, we checked the upside potential from CNN for the top 50 stock picks that were trading between $1 billion and $10 billion and ranked the stocks in ascending order of this upside potential. We have also added Discovery Capital Management's stake in each company and the hedge fund sentiment around each stock. Note: All data was sourced on May 8. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here). Discovery Capital Management's Stake: $53.96 million Number of Hedge Fund Holders: 66 Market Capitalization as of May 8: $6.63 billion Average Upside Potential as of May 8: 55.07% Nebius Group N.V. (NASDAQ:NBIS) builds infrastructure for the global AI industry. It provides AI-centric cloud platforms, large-scale GPU clusters, and developer tools. It also operates Toloka AI for data services, TripleTen for tech education, and Avride for autonomous driving, which creates a full ecosystem to support AI development and applications. In April, the company partnered with DDN. This is one of the world's leading AI and data intelligence companies. By integrating DDN Infinia and EXAScaler into its AI cloud, Nebius is expanding the performance and scalability of its platform for AI workloads. With DDN and Nebius, enterprises can deploy AI workloads faster and more efficiently, at a lower cost. Earlier in February, DA Davidson initiated coverage of Nebius Group (NASDAQ:NBIS) with a Buy rating and a $50 price target. In Q4 2024, the company's overall revenue increased by 466% year-over-year to $37.9 million. This was fueled by advancements in both infrastructure and software. Nebius' core AI infrastructure business alone grew by 602% year-over-year, which contributed to the company's overall revenue increase. Overall, NBIS ranks 3rd on our list of Billionaire Rob Citrone's small-cap stock picks with huge upside potential. While we acknowledge the growth potential of NBIS, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than NBIS but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
