Corporacion America Airports: Out Of The Ashes (Ticker: CAAP)

A company that has survived the warmth of collectivism is now ready to take advantage of the frigidity of capitalism.

Next three weeks: Half-year performance and short portfolio update, Adyen (quarterly update), Coupang (quarterly update)

Three previous research reports: Nelnet, Nu Holdings, MercadoLibre

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It says a lot about a business if you can maintain profitability operating under a socialist government delivering hyperinflation to its citizens. In fact, it might just be an indicator that the business has an incredibly wide moat.

I know of just two publicly traded companies that grew their earnings power in the latest bout of inflation in Argentina. One is well known: MercadoLibre. The other is less covered, and the subject of today’s comprehensive research report for Emerging Moats subscribers: Corporacion Americas Airports (CAAP, for short).

It is a testament to the airport operator model – of which CAAP is now one of the largest and most diversified in the world – that it has maintained positive operating earnings in Argentina every year for the last decade except for 2020 and 2021, which were severely impacted by COVID-19 lockdowns.

Now, after years of battling these economic headwinds, CAAP’s largest country by revenue may have the free-market man (and former CAAP economist), Javier Milei, to finally produce an economic recovery in what was once one of the wealthiest nations in the world. Maybe. At the same time, it is steadily reinvesting in new airport assets, diversifying away from reliance on a single economy.

The stock still trades at just 6x EBITDA. This should make any investor’s ears perk up.

In this comprehensive research report, subscribers will read:

• Why airports are great businesses

• The history of CAAP, the Eurnekian Family, and Javier Milei

• Betting on the Argentine Economy

• A different capital allocation strategy

• Is there an emerging moat?

• My investment decision

Why Airports are Great Businesses