Fomento Economico Mexicano SA (NYSE:FMX) is better known by its acronym FEMSA. It is the largest beer and soda bottler in Mexico and one of the largest in South America. It also owns a large and fast growing chain of convenience stores in Mexico. The stock was my top pick for the year in the InvestorPlace “Best of 2013” contest and has rewarded my confidence by storming out to a 13% advance so far.
The company’s Q4 earnings report was great but it was followed by a bout of profit taking, but I actually think that the best is yet to come for FEMSA, as the entire beverage industry is in the process of being re-rated higher by investors for the sturdiness of its growth profile. In fact, I expect these shares to rise to a new all-time high in the next month.
Buy FMX common shares now at $111.00 limit, and then set an initial profit target at $125.00.
This has been a great stock for the bulls, and I will look to recommend call options to get further upside gains from FMX. I’m watching the FMX April $110 calls very closely but the volume is very light at the moment, so I’d like to see trading pick up in those before taking action.
InvestorPlace advisor Jon Markman operates the investment firm Markman Capital Insight. He also writes a daily swing trading newsletter, Trader’s Advantage which aims to capture profits of 15% to 40% and often as much at 100% to 200% in less than 90 days.
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