Wednesday, March 26, 2014

Cuba Going Capitalistic? Time for Cuba Stocks?

Habana Lonja del Commercio
Stock Exchange

Do you realize that Cuba used to have a stock exchange? It was located in Havana during the early 1900's.  (See picture.)

Cuba must really be hurting for cash. The county needs to bring businesses in and they are doing whatever they can to attract them. The government is waiving taxes and cutting taxes, plus banning expropriations, according to the proposed law.Although the new laws are not perfect, they are a step in the right direction.

Other good news about Cuba:
- eased restrictions on Cuban Americans traveling to Cuba
- Cuban Americans allowed to send money to their Cuban relatives
- U.S. telecom companies are now allowed to do business in Cuba.

It will be interesting to see which American companies jump on the bandwagon and set up operations there. If you are looking for companies that already have a foothold in Cuba, here are a few companies that have Cuban connections, according to

The best way of investing in Cuba on a diversified basis is through the Herzfeld Caribbean Basin Fund Inc. (CUBA). It is a closed end fund which is a diversified way of playing the Cuba economy. It invests in stocks of the of the Caribbean Basin Countries and the United States, which are expected to benefit from economic growth in Cuba, Jamaica, the Bahamas and other countries. The CEF recently declared a $1.14 per share year end distribution payable in stock.

Sherritt International (SHERF) is a Toronto, Ontario based mining, and oil, and gas company that is one of the largest foreign investors in Cuba, having more business in Cuba than any other Canadian company. A major portion of their revenues are generated by the Moa Mine in Cuba, formerly owned by Freeport-McMoRan Copper (FCX), as a joint venture with a Cuban government company. They also operate Varadero, Canasí, Yumuri, Puetro Escondido oil and gas fields which they have leased in Cuba. In addition, Sherritt owns, Energas, the Cuban electric utility. The stock trades on the Toronto Stock Exchange in Canada and on the Pink Sheets in the United States, and recently generated negative earnings of 2.27 cents per share. The stock, which trades for a little over $3 per share, has 2.26 in cash per share and a 10.66 book value.

There may be more cruise travel to Cuba. So companies such as Carnival Corp. (CCL), and Royal Caribbean Cruises Ltd. (RCL) should also benefit. Carnival yields 2.5% and Royal Caribbean pays a yield of 1.8%.

For a list of ten Cuba related stocks, which has information on the PE ratio, the forward PE, the PEG, and the yield, go to

Author didn't own any fo the above at the time the article was written.


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