Best Stocks #3 (Midcap): Copa Holdings (CPA)
I’m a big believer in Latin America. While it has its troubles like every other emerging market, I continue to view its growing middle class with envy. While our middle class is being hallowed out, Latin America’s is growing exponentially. The U.S. was never more secure economically than when its middle class was growing, so history has demonstrated what this can do for a country.
Copa Holdings (CPA) is the parent company of Copa Airlines, a Panama-based airline that got its start in 1947 with help from Pan Am flying Douglas C-47 aircraft domestically. In the 1960s, Copa expanded to other countries close by and eventually jumped into bed with Continental for a 10-year stint ending in 2008.
Continental made out like bandits on their investment, but it likely would have done even better if it had hung around a while longer — CPA stock is up 415% since May 2008, when Continental sold the last of its shares.
Today, Copa has become the gateway between North and South America, and its strong operating margins reflects its dominance. In 2012, Kiplinger named Copa one of the World’s 10 Best Stocks, and in early December, author Kathy Kristof explained why she bought CPA stock for her real-money portfolio.
While airlines have their ups and downs, Copa is about the best I can think of to weather the storm.