No. 9: Arcos Dorados
Current Return: +6%
Investor: Josh Brown
Arcos Dorados (NYSE:ARCO) is Spanish for “Golden Arches” and operates one of the largest McDonald’s franchisees in the world — focused mainly on Latin America. As Josh Brown wrote in his original ARCO stock recommendation, Arcos Dorados is a play on four key themes:
- Expanding consumer spending in Latin America
- The ferocity of McDonald’s as a global brand
- Growth within a defensive sector
- The comeback potential for emerging-market equities in 2012
Arcos Dorados continues to hit all the right notes on those four original points. Unfortunately, ARCO is lagging some other emerging-market stocks — consider that the iShares MSCI Emerging Markets Index ETF (NYSE:EEM) is up 15% year-to-date gain — but still is riding the upward trend.
And as Josh wrote in a recent Arcos Dorados stock update, the company reports Q4 earnings on Feb. 22. That will be the real litmus test for how this company is growing after its 2011 IPO.