In a recent article on Yahoo about the new passport regulations, it discussed the benefit that Puerto Rico and the U.S. Virgin Islands would receive. In the past, visitors to the non-US Caribbean islands, Canada, and Mexico could travel with just an American Drivers License. However, beginning February 23, American travelers to those nations would require a U. S. passport in order to return to the United States. The Caribbean islands are anticipating economic devastation.
On the other hand, a boom is expected for the travel business and economy of the U.S. territories in the Caribbean, which include the Commonwealth of Puerto Rico and the United States Virgin Islands, consisting primarily of the islands of St. Thomas, St. John, and St. Croix. [Trivia: What is the only part of the United States where traffic drives on the left? U.S. Virgin Islands.] Because they are considered part of the United States, American tourists don't need a passport to travel in those locales.
So if the Puerto Rican economy benefits from the new Passport law, does that mean that the Puerto Rican stocks should benefit? Most of the publicly traded companies in Puerto are banks or bank holding companies which have the same risks that all United States banks have. There is also the "risk" of Puerto Rico becoming independent, which may not even be a risk at all. The economy on the island has been shaky since May of 2006, when they experienced the first partial shutdown of the government in Puerto Rico's history. But if you are willing to accept the risks, then here is a list of Puerto Rican stocks to review, most of which are traded on the New York Stock Exchange [NYSE stocks listed first].
First BanCorp (FBP) banking
Doral Financial Corp. (DRL) mortgage banking, banking, institutional securities, insurance
Oriental Financial Group Inc. (OFG) banking, insurance
R&G Financial Corporation (RGF) banking, mortgages
Santander Bancorp (SBP) banking, asset management, insurance
W Holding Co. Inc. (WHI) banking, insurance
Popular Inc. (BPOP) banking, leasing, insurance
Equus Gaming Co. (EQUUS.PK) thoroughbred racing
Margo Caribe Inc. (MRGO.PK) tropical plants and trees
No. Not really, you have to pick your fights. Margo is having ton's of problems getting their financial reports out, Doral faces a 675 million dollars payout by July and it does not have the money, the stock is facing a one way trip to OTC. Of the PR stocks, I would be bullish on BPOP and OFG. BPOP is the incumbent bank in the island, however it is a conglomerate of business having a virtual monopoly on ATM transactions and it has a profitable comercial vehicle rental unit. OFG has been expanding into residential mortgages in addition to commercial ones.
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