PINFRA Looks Undervalued, With A Healthy Growth Pipeline

Investors are clearly concerned about the future holds for Mexico, and I believe that has created a window of opportunity with Promotora y Operadora Infraestructura ("PINFRA") (OTCPK:PUODY), a major operator of toll roads in Mexico. With close to 30 toll roads in its portfolio and a high likelihood of adding more in the near future, not to mention opportunities in areas like ports, PINFRA generates very strong, repeatable free cash flows that I do not believe are as economically sensitive as the market fears.

I don't expect PINFRA to duplicate the remarkable growth it has shown over the last decade, but it doesn't need to in order to generate strong results for shareholders. Mexico needs to upgrade its infrastructure and I believe PINFRA's proven track record of execution leaves it well-placed to win bids sufficient to generate ongoing growth in the 6% to 7% range, supporting a fair value about 15% to 20% higher than today's price.

Investors should note that PINFRA's U.S. ADRs, though sponsored, are not especially liquid.

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PINFRA Looks Undervalued, With A Healthy Growth Pipeline