High Quality Mexican Companies

[rb]

Something tells me that in the near future Mr. Market will behave in such a way that investment opportunities will become available in Mexico. As such I thought we should maybe put together a list of high quality Mexican companies along the lines of which we like: established, good moat, shareholder friendly, good management, long runway, etc.

 

I'll go first: FEMSA

[augustabound]

Construction, surveying, concrete, wall builders.................

[Sleepwell]

This is a good post, the Mexican stock market has been overvalued for some time now but definitely there will be better entry points in the future, especially with the current backdrop. Country has good market system, ok political system and very attractive demographics (large and growing middle class, young population, low credit penetration etc.)

 

I would add:

 

-Arca Continental (second largest bottler)

-Unifin Financiera (leasing company)

-ALFA (large industrial conglomerate)

-Alpek (chemicals)

-Bimbo (consumer staples, largest bread company)

-Televisa (largest hispanic media company)

 

Haven't done a lot of research on any of these, but having worked a couple of years with Mexican clients I can say these are good names to keep an eye on.

[longlake95]

ASR - airport operator

[Phaceliacapital]

Telesites

[Spekulatius]

Anyone still following Femsa (FMX). I bought a few shares yesterday. This company has transformed by shedding the beer business (a good decision) and expanding convenience retail (acquisition of the European Valora business). What caught my attention was the expansion of the OXXO stores in Columbia and Brazil which seems to going well, albeit only a small base. Both market are significant compared to Mexican markets.

 

They still own ~47% of KOF (Coke bottler) which had been doing alright.

I have owned this in the past  it alway tended to sell due to volatility and macro issues Mexico but it looks to me that the story has and continues to change for the better. That said, the macro issues in Mexico are still and issue (see that last quarterly report ) but FMX has a strong balance sheet and the business are fairly resilient. I think it’s one of the cheapest way to get in the convenience store space.

[schin]

There was a period of time that Carlos Slim was highly touted and one of the richest people in the world. I bought a book about him and since then, his lore has tapered.

 

@rb - How is Mexico any different from any BRIC country? Or Canada based on proximity to US? Why Mexico for you?

[Spekulatius]

35 minutes ago, schin said:

There was a period of time that Carlos Slim was highly touted and one of the richest people in the world. I bought a book about him and since then, his lore has tapered.

 

@rb - How is Mexico any different from any BRIC country? Or Canada based on proximity to US? Why Mexico for you?

I don’t care about Mexico in particular but I like to invest where I where I find interesting business trading at attractive valuations.

 

Mexico is interesting because valuations were actually sky high before the GFC and even after and have moved continuously down since. At some point interesting opportunities get created in these circumstances,.

 

I also think it’s a great time to diversify out of the US markets where I think governance has gotten worse while valuations are still sky high. I can live with iffy governance but I don’t like to pay up for it.

[Spooky]

10 hours ago, Spekulatius said:

I also think it’s a great time to diversify out of the US markets where I think governance has gotten worse while valuations are still sky high. I can live with iffy governance but I don’t like to pay up for it.

 

Are there any other jurisdictions that you find interesting right now?

[hasilp89]

 

@Spekulatiushave you looked at TBBB. Checks all the boxes for me except for valuation - not against paying up for quality, but still struggling. 

[schin]

15 hours ago, Spekulatius said:

I don’t care about Mexico in particular but I like to invest where I where I find interesting business trading at attractive valuations.

 

Mexico is interesting because valuations were actually sky high before the GFC and even after and have moved continuously down since. At some point interesting opportunities get created in these circumstances,.

 

I also think it’s a great time to diversify out of the US markets where I think governance has gotten worse while valuations are still sky high. I can live with iffy governance but I don’t like to pay up for it.

 

Yes, I'm with you. International has been a great bargain hunting ground. I'm big into Germany, if you see any of my posts on DB and Commerzbank. 

 

I'll definitely look at Mexico. I keep hearing how it's a great market, but Citigroup is trying to sell their operations there.. Yet, Nubank and MELI have been trying to get in. I was interested back in the day with NAFTA and how Telmex and Cemex were dominant... But, it's always sprinkled with the instability of the government and the cartel wars...

 

But, definitely interested in recommendations in this thread.

[Spekulatius]

10 hours ago, Spooky said:

 

Are there any other jurisdictions that you find interesting right now?

Europe, Japan, South America, Mexico is what know and like best. If I had access to, I would also look into Korea

[xboojum]

Dave Waters of Alluvial Capital wrote up Grupo Herdez (salsa and sauces maker) about 18 months ago; it popped 30% today on news that McCormick is buying out half of Herdez's (previously 50%) stake in their Mexican JV at a $3 billion valuation. https://alluvial.substack.com/p/a-mexican-blue-chip-bargain

[Marco Van Basten]

Has anyone done work on Bolsa Mexicana?  Also, nobody is interested in Moctezuma?

[Spekulatius]

14 hours ago, Marco Van Basten said:

Has anyone done work on Bolsa Mexicana?  Also, nobody is interested in Moctezuma?

I have. Moctezuma - extremely illiquid. It’s essentially controlled by Buzzi, so I decided to buy some Buzzi instead.

 

Bolsa Mexicans . earning have not done much for many years now. The reason is that the Mexican stock market is a backwater with terrible liquidity and also has not performed  well.  Nola’s is an old fashioned exchange that generates revenue from trading and more than half the revenue is custodian revenue, which depends on total market capitalization. Also, that business  has shrinking margins. It’s more like custodian bank like BK than a modern exchange like CME, LSEG which are infrastructure  business that sell a lot of adjacent services.

 

I think Sheinbaum really should reform the Mexican stock market which seems to have outdated modus operanti but that may include introducing competition, which would not be great for Bolsa Mexicana.

Edited August 22, 2025 by Spekulatius

[Marco Van Basten]

8 hours ago, Spekulatius said:

I have. Moctezuma - extremely illiquid. It’s essentially controlled by Buzzi, so I decided to buy some Buzzi instead.

 

Bolsa Mexicans . earning shave not done much for many years now. The reason is that the Mexican stock market is a backwater with terrible liquidity and also has not performed  well.  Nola’s is an old fashioned exchange that generates revenue from trading and more than half the revenue is custodian revenue, which depends on total market capitalization. Also, that business  has shrinking margins. It’s more like custodian bank like BK than a modern exchange like CME, LSEG which are infrastructure  business that sell a lot of adjacent services.

 

I think Sheinbaum really should reform the Mexican stock market which seems to have outdated modus operanti but that may include introducing competition, which would not be great for Bolsa Mexicana.

Thank you very much.