Shares are also outright cheap for such a stable company, as the stock sells for less than 18 times forward earnings. In addition, Ambev has a great balance sheet and maintains a positive net cash position, helping insulate the company from near-term economic volatility.
For one thing, beer hasn’t become a political football in Latin America the same way as it has in the U.S., and for another, craft beer is much less of a competitive threat in South America. While AB-InBev has had its share of problems, especially as it relates to the Bud Light brand, Ambev has been a more attractive business. However, as Terran starts to generate far more revenue and deepens ties with key partners like Lockheed Martin, it may be able to start generating positive earnings per share as well.Īmbev is the South American division of global brewing giant Anheuser-Busch InBev SA/NV ( BUD). The firm also will likely need to raise a lot more capital to expand its manufacturing capacity to fulfill the Rivada order. The issue is with profitability, or the lack thereof. That’s simply a massive amount of business for Terran, which has a roughly $225 million market capitalization today. Under the terms of the deal, Terran will build 288 low-Earth-orbit satellites. And in February, Terran shares soared as much as 70% after it won a gigantic $2.4 billion contract with Rivada Space Networks. Terran, for what it’s worth, has scored a $100 million investment from defense giant Lockheed Martin Corp. Space has become an increasingly attractive field thanks to increased investments and deal-making in the sector. Terran Orbital is a company that designs and manufactures satellites. But at less than five times projected forward earnings, upside could be considerable if there are signs of operational improvements. Lumen has a ton of debt and faces challenges in trying to modernize its business. Meanwhile, the company has brought in management that is focusing on the company’s more promising units like fiber broadband, which is growing at a nearly 20% annualized rate. However, with the stock down more than 90% over the past decade and more than 80% in the last year alone, Lumen’s share price already reflects these problems. As a result, Lumen’s business has shrunk considerably: Revenues are down from $22.6 billion in 2018 to $17.5 billion last year. There’s been a rapid decline in demand for traditional telephone lines due to technological advances. The firm has struggled in recent years due to its wireline telephony business. Lumen Technologies, formerly known as CenturyLink, is a telecom company. AVAL stock has rallied as well, but it is still a bargain at about seven times forward earnings and, the company makes generous monthly dividend payments. As a result, the Colombian peso has surged, becoming the top-performing emerging market currency in 2023 to date.
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However, a series of recent political scandals has caused the president’s ruling coalition to disintegrate. Nowadays, the sector is trading at low levels due to political developments.Ĭolombia elected a left-wing president in 2022, and he proposed radical reforms to the economy which could have significantly hampered Aval’s profitability. Due to the relatively low level of domestic competition, Colombian banks historically have earned high profit margins.
In aggregate, Aval’s properties make up roughly a quarter of the Colombian banking market. Aval has a majority ownership position in four different Colombian banks. Grupo Aval Acciones y Valores is a Colombian holding company.
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