< The 2015 Latin America Research Team
Total appearances: 10
Team debut: 1994Down one position to third place are Nikolaj Lippmann and his Morgan Stanley teammate, whose expertise at analyzing the cement space wins investor praise. The Mexico City–based pair, one investor remarks, is also adept at “leveraging resources across various countries, including the U.S., to provide investors with a global view.” Two chemicals manufacturers are among the researchers’ favorite domestic companies: petrochemicals, plastics and synthetic fibers maker Alpek in Nuevo León; and Tlalnepantla de Baz–based Mexichem, a worldwide leader in the plastic pipes industry. The polyester cycle has reached bottom, reports Lippmann, 39, and Alpek is poised to reap the benefits of capital investments made over recent years. Rated overweight, its stock was trading at 22.09 pesos in mid-July, and the squad predicts a rise to 24 pesos. Mexichem is also expected to outperform, owing to projections for “solid growth through at least 2018,” the crew chief explains. The analysts are further impressed with management’s “focus on a stronger institutional framework,” he adds. They peg Mexichem’s shares at 60 pesos, implying a 39 percent upside to their value in mid-July. Among financials names, they favor Macquarie México Real Estate Management, a real estate investment trust specializing in industrial, office and retail properties. Fibra Macquarie, as the company is known, is “among our top picks due to its very attractive valuation, high dividend yield and dollar revenue generation in an environment of Mexican currency weakness,” Lippmann says. The duo’s price objective for the stock is 33 pesos; it closed at 22.16 pesos in mid-July. Finally, he counsels, investors should “avoid Mexican consumer staples, due to tax risks and high valuations.”