Real estate, materials, and consumer staples are expected to emerge later in the expansion cycle. As pointed out, banks and energy are the first, followed by the remaining industries.
That said, Cementos Argos resembles Loma Negra in Argentina. If Colombia elects a pro-business president in the 2026 elections, companies like Argos would benefit greatly. Argos maintains a healthy balance sheet and has been profitable over the past five years, as evidenced by its net earnings.
Nutresa generates approximately 70% of its revenue from Colombia, with the remaining 30% coming from the US and Colombia's neighboring countries. The geographical diversification has enabled Nutresa to stay profitable over the last few years. Plus, the company is not highly leveraged. The total debt-to-equity ratio is below 80%.
It's worth mentioning that neither Cementos nor Nutresa is deeply undervalued compared to its DM peers. So, both companies are more of growth stories than value bargains.
In summary, both enterprises are attractive propositions. However, I see more Alpha, at least for now, in Colombian banks and Ecopetrol. The time to bet on cement producers and food producers will come later, probably at the beginning of 2026.
I am curious to hear your take on Nutresa and Argos.
I prefer grupo argos only listed on Colombia stock exchange instead of only cement subsidiary cementos argos which also has otc.
However grupo sura which is a financial company has big cross sharing relationship with grupo argos a little bit less then 50% and is also listed on otc and might perhaps fall in your target group.
Both groups are discussing to dismantle their mutual shareholdings
Ecopetrol's share price chart is indeed finally beginning to look good (plus it offers a double-digit dividend yield, although it only pays it once a year).
But one note of caution is its governance. In particular, the company subsidizes domestic gasoline and diesel prices and in return the government has set up a fund to recompense it. But the government has typically failed to finance the fund to fully compensate the company. That's why you get the huge "trade receivables" in the cash flow statement each year (in FY23 the receivables increase cash bleed equaled the entire net income, or the entire capex).
In 2024, it looks like the working capital swung from a huge increase to a small decrease. But part of that was the result of the oil price declining y-o-y (which means the accounts receivable from consumers fall too). Perhaps the stock has been doing well because there was some improvement to the subsidy compensation from the government fund. But given that Petro is still in charge and has just forced out his finance minister, it may well be that he will put a screw on EC again.
Ecopetrol is a curios case. The company has enormous upside potential if it plays its cards well. In my opinion, its aces are its underdeveloped offshore fields. In the area, all countries struck massive offshore oil reserves. Think about Venezuela, Suriname, and the Saudi Arabia of Latin America, Guyana.
EC bond prices (those with maturity in 2029 and 2030) are a positive indicator. Despite the political volatility in Colombia, they trade at par or with a tiny discount.
Let's see what the next election will deliver. For now, the polls favor a shift to the right, which is positive for business and investors. In that scenario, EC would be one of the fastest horses to ride on.
What are your thoughts on other Colombian energy plays, such as Parex and Geopark?
How do you look at cementos argos and grupo nutresa otc listings?
Thanks for your question.
Real estate, materials, and consumer staples are expected to emerge later in the expansion cycle. As pointed out, banks and energy are the first, followed by the remaining industries.
That said, Cementos Argos resembles Loma Negra in Argentina. If Colombia elects a pro-business president in the 2026 elections, companies like Argos would benefit greatly. Argos maintains a healthy balance sheet and has been profitable over the past five years, as evidenced by its net earnings.
Nutresa generates approximately 70% of its revenue from Colombia, with the remaining 30% coming from the US and Colombia's neighboring countries. The geographical diversification has enabled Nutresa to stay profitable over the last few years. Plus, the company is not highly leveraged. The total debt-to-equity ratio is below 80%.
It's worth mentioning that neither Cementos nor Nutresa is deeply undervalued compared to its DM peers. So, both companies are more of growth stories than value bargains.
In summary, both enterprises are attractive propositions. However, I see more Alpha, at least for now, in Colombian banks and Ecopetrol. The time to bet on cement producers and food producers will come later, probably at the beginning of 2026.
I am curious to hear your take on Nutresa and Argos.
I prefer grupo argos only listed on Colombia stock exchange instead of only cement subsidiary cementos argos which also has otc.
However grupo sura which is a financial company has big cross sharing relationship with grupo argos a little bit less then 50% and is also listed on otc and might perhaps fall in your target group.
Both groups are discussing to dismantle their mutual shareholdings
Thanks for the hint. I will take a further look at Argos Group and Grupo Sura's nits and bits.
Ecopetrol's share price chart is indeed finally beginning to look good (plus it offers a double-digit dividend yield, although it only pays it once a year).
But one note of caution is its governance. In particular, the company subsidizes domestic gasoline and diesel prices and in return the government has set up a fund to recompense it. But the government has typically failed to finance the fund to fully compensate the company. That's why you get the huge "trade receivables" in the cash flow statement each year (in FY23 the receivables increase cash bleed equaled the entire net income, or the entire capex).
In 2024, it looks like the working capital swung from a huge increase to a small decrease. But part of that was the result of the oil price declining y-o-y (which means the accounts receivable from consumers fall too). Perhaps the stock has been doing well because there was some improvement to the subsidy compensation from the government fund. But given that Petro is still in charge and has just forced out his finance minister, it may well be that he will put a screw on EC again.
https://www.ecopetrol.com.co/wps/portal/Home/en/investors/financial-results/sec-filings
https://www.ecopetrol.com.co/wps/portal/Home/en/investors/financial-results/quarterly-results
Thanks for your comment.
Ecopetrol is a curios case. The company has enormous upside potential if it plays its cards well. In my opinion, its aces are its underdeveloped offshore fields. In the area, all countries struck massive offshore oil reserves. Think about Venezuela, Suriname, and the Saudi Arabia of Latin America, Guyana.
EC bond prices (those with maturity in 2029 and 2030) are a positive indicator. Despite the political volatility in Colombia, they trade at par or with a tiny discount.
Let's see what the next election will deliver. For now, the polls favor a shift to the right, which is positive for business and investors. In that scenario, EC would be one of the fastest horses to ride on.
What are your thoughts on other Colombian energy plays, such as Parex and Geopark?