Hot Chile Buy
Monday Dec 04, 2006
After flying under the radar for years, my favorite airline play started to get the attention of the big Wall Street brokerage houses last week -- but my Taipan readers were safely positioned in this stock before the hype began.
Lan Airlines S.A. (LFL:NYSE), formerly known as Lan Chile S.A., provides both domestic and international passenger and cargo air services to more than 50 destinations in Chile, Peru, the South Pacific, the Caribbean, Europe and the United States. In fact, Lan Airlines is the main provider of these services in Chile, and one of the largest airlines in the burgeoning Latin American market.
Following a blowout Q3 earnings report showing a profit of $51.5 million (versus market expectations of $33 million), a slew of brokerages and big-name investment banks raised their ratings on the LFL stock. This pushed LFL to a new all-time high of $51.39.
I recommended LFL to Taipan subscribers at $35.60, and I recommend loading up on more shares now.
Lan is very attractive fundamentally, with a forward P/E of 12 and a PEG of 0.69, indicating that it is undervalued. The Lan chart shows a beautiful unwavering uptrend, and all things considered I’d set a $65 medium-term price target. Though we’re not catching the beginning of the ride, I see plenty more upside potential over the coming quarters, especially if oil prices continue to subside.
Cheers,
Erin Beale
Taipan
P.S. This is just one in a long line of dead-on calls on emerging markets plays that Taipan has made recently. Just last month, we took gains of 177% off the table on an Argentine beverage company.
We’re currently looking at a spectacular play on China that opens the “secret backdoor” to plundering China’s explosive IPO market -- without risking one dime overseas. Follow this secure link to join Taipan today and get in on our next triple-digit winner.