Thursday, May 17, 2007

Stocks in the Other Big South American Country: Argentina

Most investors know that the 'B' in BRIC stands for Brazil. But there is another country in South America experiencing growth. Argentina is the second largest country in South America and the eighth largest in the world. From an economic standpoint, the country has come back from 25% unemployment, defaulted government bonds and a 75% devaluation of their peso which took place in 2002. With economic growth averaging around 9% over the last couple years, it appears that their may be investment opportunities there. All of these companies that are Argentina based have ADR's [or ADS's] that trade on the New York Stock Exchange.

Investments and Representations Inc., also known as IRSA, also known as Inversiones y Representaciones S.A. (IRS) has the unforgetable stock symbol of IRS! This is a Buenos Aires based real estate developer which is involved in residential properties, raw land, shopping centers, office buildings, and luxury hotels. It has a P/E of 23 and a srice sales ratio of 3.8. Their quarterly earnings growth year over year was up 388% on a 53% increase in revenues

Telecom Argentina S A (TEO) is a Buenos Aires based company. One of the largest providers of telecommunications services, and the primary company that serves the northern part of Argentina, including half of Buenos Aires. They also provide Internet services, directories publishing, and wireless services in Argentina. It has a forward P/E of 20 and a very high PEG of 20.

The other large telephone company in Argentina, Telefonica of Argentina, Inc. is (TAR), which provides domestic and international long distance services, public telephone services, and Internet services. P/E is a very high 333 and the price sales ratio is 8.88. Their yield calculates out to over 11% but that can't be relied upon because it is based on the first dividend they have paid in five years. The company has about $800 million in debt with only $96 million in cash.

Transportadora de Gas Del Sur S.A. (TGS) provides natural gas to residential, commercial, and industrial customers in Argentina. It has a P/E of 11 and a P/S of 2.8. Quarterly earnings year over year were down by over 26%.

YPF S.A. (YPF) is involved in the exploration, and production of oil and gas in Argentina. P/E is 11, P/S is 2. They pay dividends at least once or twice a year and their current yield is 9.2%. Quarterly revenue growth was up slightly but earnings were down over 45%.

Apco Argentina Inc. (APAGF) is a way of investing in Argentina by investing in a United States company. This is a Tulsa Oklahoma based company with its primary operations of the exploration and production of oil and gas in Argentina. It has a P/E of 17, a P/S of 11.2, and even pays a yield of 1.6%. They have $50 million in cash and no long term debt.

Author does not own any of the above.


emthree said...

Your article on Argentinian stocks did not mention Cresud S.A.C.I.P.Y.A Adr. (CRESY). This is a farming company and it is probably the most interesting Argentinian ADR/ADS.

Would like to know your opinion if you are familiar with the stock. Details of other ADRs are available at

Stockerblog said...

You are right. I missed including this one, which is involved in agriculture and cattle. The P/E is fairly high at 75, and so is the P/S at 15.8. Quarterly earnings were up 17% but revenues were down by 13%.