This post is one of six articles on beverage-related stocks. Here are five other investment ideas to sip on.
"The economic data shows that Latin America Is booming; it's a self-feeding cycle of booming global trade and rising domestic consumption," says income expert Nilus Mattive.
In his Dividend Superstars newsletter, he explains, "Now's a great time to look for some South of the Border bargains." Here, the advisor looks at wine maker, Vina Concha y Toro (NYSE: VCO).
"I'm a wine drinker. And, I'm also a value guy. So I'm always looking for quality wines that won't break the bank. This Chilean winery regularly delivers.
"Its flagship 'Don Melchor' cabernet sauvignon is consistently rated among the finest in the world by major publications like Wine Spectator, yet it costs a fraction of similarly rated Napa and Bordeaux bottles.
"Its Marques de Casa Concha is equally decorated, and priced well below the crucial $20-a-bottle mark. And brands like Casillero del Diablo and Frontera are available at lower price points for everyday, casual drinkers.
"Even better, all of Vina Concha's wines are produced on a fairly large scale, making them readily available. No wonder the company's wines are becoming big sellers at both retail locations and many of the world's best restaurants.
"Okay, what's the appeal for investors? This gem of a Latin American company is publicly-traded, and available on the New York Stock Exchange as an American Depositary Receipt. Vina Concha has yet to get as much attention as other major vintners. In fact, I couldn't find one major Wall Street analyst following the stock.
"Why are most U.S. investors ignoring this company? I don't know. Maybe it's just plain off their radar screens. Or maybe major analysts are content covering the same old well-known Latin American stocks. Not me! I love coming across less-followed companies, especially ones that I have personal experience with.
"It's not like Vina Concha isn't well established, mind you. The winery was founded all the way back in 1883. It's one of the ten largest wine concerns in the world, and the largest Latin American exporter bar none. In short, it's well positioned to ride what I consider a major trend - the increasing popularity of wine as the alcoholic beverage of choice, especially here in the U.S.
"Even better, most wine drinkers are currently infatuated with international value wines, which plays right into Vina Concha's specialty. Operationally speaking, the company has invested heavily to make major technological advances. That is not only translating into better wines, but also more efficient production.
"It's worth noting that Vina Concha is vertically integrated, meaning it grows its own grapes, vinifies its own wines, bottles them, handles distribution, etc. The company's latest financial results were impressive: Not only was it able to pass on price increases, but second-quarter profits per ADR jumped 29.3%.
"There is always the risk that a global economic slowdown will hurt demand for wine. However, alcoholic beverages have typically been insulated from past downturns, and Concha y Toro's value-oriented names should remain attractive to drinkers through good times or bad.
"Meanwhile, VCO has been regularly pouring out dividends to its investors. The company's ADR debuted in 1994, and it has delivered steadily rising payments ever since. Over the last five years, the dividend has grown 26%.
"Perhaps the best part: After a solid surge, the shares got pounded back down with other Latin American stocks. While the stock is somewhat speculative, I think it has attractive total return potential could mean plenty more upside in a hurry.
"Please note that the NYSE-listed ADRs do not trade significant volume on a daily basis. For that reason, you should absolutely use a limit orders."
Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.










