Wednesday, December 17, 2014

Easing of Commerce and Travel Restrictions with Cuba: Top Cuban Stocks

Habana Lonja del Commercio
Stock Exchange
President Obama is speaking today about the easing of commerce and travel restrictions with Cuba, and re-establish diplomatic relations with the country. This came about after the freeing of Alan Gross, an American contractor after being imprisoned for five years.

Americans will be allowed to travel to Cuba and use credit and debit cards there. They will also be allowed to open accounts with Cuban institutions. In addition, an American Embassy will be set up there.

It will be interesting to see which American companies jump on the bandwagon and set up operations there. If you are looking for stocks of companies that already have a foothold in Cuba, there 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 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 is up 42% today.

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 (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. The stock yields 5.9%..

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 2.3% and Royal Caribbean pays a yield of 1.5%.

For a list of several 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.



Anonymous said...

Still some risk, since Congress unlikely to lift trade restrictions any time soon. I would say market is overly bullish.

Stockerblog said...

I agree that some Cuba stocks have moved a bit more than they should have. However, longer term, maybe in the next six months, we may see some positive results from Cuba travel with the cruise lines.