Monday, July 31, 2017

Will Turbulence In Mexico Mean A Bumpy Ride For OMA?

The last year or so has had its ups and downs for Grupo Aeroportuario del Centro Norte (OMAB), also known as “OMA”. The prospect, and then reality, of Donald Trump's victory in the U.S. Presidential election took away almost a third of the stock's value in late 2016 despite healthy traffic numbers, as investors worried that this Mexico-centric airport operator would suffer disproportionately from a change in U.S.-Mexico relations.

Since then, a lot of optimism toward Mexico and Mexican equities has returned, lifting the shares back to within 10% of their all-time high. Still, while I do believe OMA is a well-run airport operator, I don't think an “all clear” is entirely reasonable at this point. Mexico's economy is doing pretty well, true, but rates are rising, there is still political/trade risk with the new U.S. administration, Mexican airlines have been adding quite a bit of capacity, and next year will see a new election cycle in Mexico.

Read more here:
Will Turbulence In Mexico Mean A Bumpy Ride For OMA?

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