Author: Gordon Platt

Investors are able to buy shares in fundamentally strong companies in Latin America at record low price/earnings ratios after a sell-off in recent months triggered by falling commodity prices, according to Auerbach Grayson, a New York-based brokerage firm that is expanding in the region.

In late January the firm added exclusive partnerships with brokers in Bolivia, Ecuador, Costa Rica, Panama and Paraguay, giving it coverage of 200 Latin American equities in 15 countries and expanding its global network of broking partners to 121 countries.

“Across Latin America strong companies with cheap valuations are becoming increasingly attractive to investors,” says Melissa Winter, director of Latin American and Caribbean equity sales at Auerbach Grayson. Brazil and Argentina offer the lowest P/Es in Latin America, she says. The firm is expanding at the same time that global banks are reducing their coverage across the region, she says.

Latin American economies are supported by strong central bank reserves, increasing domestic demand for goods and services and low levels of external debt, Winter says. In Brazil she recommends Copasa, a water utility controlled by Minas Gerais state. In Peru she likes food company Alicorp, and in Trinidad and Tobago she recommends conglomerate Neal & Massy.

Gordon Platt