• AI bears are getting a bit cocky here; just as rising stock prices didn’t mean LLMs were all-powerful, falling share prices don’t mean they’re useless, either.

• LLMs will continue to see rapidly increasing adoption, but probably not at a rate sufficient to profitably pay off current investors.

• Exiting Estee Lauder in the aggressive portfolio. Thesis…

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• Buy-and-hold purchases this month, with a heavy focus on LatAm.

• I continue buying U.S. government bonds -- they become better portfolio insurance as the entry point/starting yield improves.

• I added to Walmart Mexico, which trades at a massive discount to WMT despite similar growth and higher local market share.

• The case for Jeronimo Martins, a seemi…

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Summary

• Brazil popped on an election poll Friday. Here’s the details.

• CAAP announces decent Q2 earnings along with its first-ever dividend pa…

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• Colombia’s earthquake -- the immediate reaction and some bigger picture investment implications for Colombian equities like Tecnoglass.

• Grupo Aval and Cibest/Bancolombia both reported strong earnings. The details on both, and why I remain very bulled up on AVAL in particular.

• Nu delivered exceptional Q2 results, with 67% EPS growth and stunning pro…

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• Colombia’s new president Abelardo de la Espriella signals a pro-investor agenda, targeting tax cuts, improved U.S. relations, and a revival of Ecopetrol/energy sector.

• Inter & Co. delivered record Q2 results—EPS, ROE above 16%, NIM over 10%, and capital neutrality—yet trades at sub-7x earnings due to macro and political overhang.

• A comment on the B…

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• Quick takes on the Situational Awareness fund blow-up and Warsh’s FOMC presser.

• ICE buys MarketAxess; nice for us, but also a reminder about how value stocks can get taken out at low prices.

• Various EM currencies, particularly in Latin America, have become overvalued this year.

• I’m calling a near-term top on the Colombian Peso in particular. But don…

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• AI momentum-driven trade is unwinding, with leveraged products amplifying both rallies and selloffs; rationality may be returning to tech valuations.

• TFS Financial remains a solid holding, offering a 7.5% yield-on-cost and potential 50% upside from a potential looming second-step MHC conversion.

• Booz Allen Hamilton and Roper Technologies are perfor…

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• I am shorting the U.S. Global Jets ETF (JETS) as a hedge, given overvaluation and structural airline sector risks.

• JETS has a number of top positions that are quite likely to go bankrupt in coming years (American, Frontier, Jetblue).

• Industry ‘capacity discipline’ is illusory; supply constraints are easing, setting up for margin compression and pot…

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• SK Hynix trades at a significant premium on the Nasdaq versus its Korean listing. Here’s why this isn’t a slam dunk arbitrage opportunity despite the seeming appeal.

• Memory stocks are at cycle highs, with multiple $1T+ valuations, but unsustainable CAPEX burdens on big tech clients and rising Chinese competition threaten long-term profitability.

• Mo…

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• The aggressive portfolio was up 5.3% in H1 and has delivered a 21% CAGR since 2020, meeting its 20% annual target and never posting a down year.

• I am maintaining a sizable cash position, prioritizing flexibility and risk management over chasing short-term upside in frothy markets.

• Latin American equities, especially hyper-growth names and airports,…

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• Brief comments on the Venezuela earthquake and final look at Colombian election/market impact.

• Buy-and-hold portfolio: 11 buys, 2 sales this month. On when I sell and thoughts on managing an overall index-styled portfolio.

• Making the detailed case for new longs including MarketAxess and Boston Scientific.

• Also adding to JD, Walmex, and plenty of oth…

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• Colombia election final word before tonight’s results.

• Warsh’s first FOMC meeting reiterated the hawkish turn. The Fed is going to get inflation down, regardless of the impact to equities.

• Why the Iran War failed to lift oil nearly as high as the bulls had expected.

• My thoughts on oil and energy stocks going forward.

Final Colombia Election Thoughts

N…

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• Grupo Aval has now doubled from our entry; there’s plenty more upside to come as the market slowly prices in the new government.

• I’m indifferent to SpaceX, but increasingly concerned about the low-quality companies joining major indexes like the Nasdaq 100.

• It won’t be today, and it won’t be tomorrow. But we’re drawing closer to the inevitable day …

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• Sureste Airports (NYSE:ASR) is a strong buy, offering 50%+ upside to a $450 target by year-end 2027, plus attractive dividends.

• ASR is trading at a discounted 7x forward EBITDA despite adding two major new earning assets which will sharply boost EBITDA going forward.

• Market is underpricing ASR’s diversified portfolio, now less reliant on Cancun, with significant USD and international exposure, and robust 15% annualized EBITDA growth.

• Consensus estimates are too low, analysts will need to raise their estimates and price targets aggressively over the next year.

It’s time to buy Sureste Airports (NYSE:ASR) in the aggressive portfolio once again. You’ll recall that we purchased ASR shares at $300 last fall and then sold at $370 into the Q1 rally. I’m always open-minded about taking a nice short-term gain for the aggressive portfolio.

That said, I’ve been a Sureste shareholder in my primary account since 2018 and intend to hold for many years to come. So, don’t read too much into my trading activities; that’s purely a function of the aggressive portfolio, where I’m aiming to deliver at least 20%/year. That level of IRR requires some active management.

And it’s time for such a move now -- another opportunity is upon us as ASR stock has dropped from the recent $380 high back to below our prior entry in a straight line. I’m happy to make the same money twice; here’s why ASR stock is a strong buy once again.

Sureste shares have gone from the top to the bottom of the long-term trendline over the past two months. Given that the business will be growing more quickly than usual this year, there’s a good chance the stock will be back at the top of the range as well.

The core argument is that Sureste made a big purchase last fall, buying a 20-airport concession from Brazilian seller Motiva. The market is not pricing in any benefit from the new asset; in fact, ASR stock is trading below where the Motiva deal was announced. This is pure silliness.

Sureste bought the Motiva airports at a much more favorable valuation than I had expected. In addition, Sureste also made a move into U.S. airport concessions – another great idea on their part which hasn’t been fully reflected in their financials or the stock price just yet.

In short, we have a great business trading well below its historical average multiple that now has two major new earning assets that will start contributing this year. The main headwind on the stock (high jet fuel prices tied to Iran) may now be resolved as well; oil has hit its lowest level since the war started over the past week.

So, the main issue for the stock is now being resolved, and two new earning assets are about to kick into gear. It’s a perfect set-up for ASR stock to quickly trade back to the all-time highs and beyond. Specifically, I see the stock trading to $450 over the next 12 to 18 months -- more than 50% upside plus dividends from today’s level.

Why You Should Own Mexican Airport Operators

I’ve written about airports extensively in this publication. I’d urge readers to go through the back archives if you want the full explanation for why airports are such a tremendous asset class. That said, I’ll give you the concise summary here.

Mexican aviation has grown at more than three times the rate of Mexican GDP over the past 20 years; Mexican GDP has averaged less than 2% annualized, but Mexican airport traffic is up 6.1%/year since 2006. And yes, that includes both the 2008 financial crisis and the pandemic.

There’s a second level of operating leverage here; the airport operators have grown their revenues at about 2.5x times the rate of their traffic growth. So, if you post a +6% traffic year, on average, you’re going to get about +15% revenue growth. And, this is 65% EBITDA margin revenues that we’re talking about. Airports are an absolute cash gusher.

How can a seemingly pedestrian transportation asset post low-to-mid teens revenue growth for decades on end?

That’s because the airport operators invest heavily in non-aeronautical revenue streams: Think hotels, car parking, concessions, warehouses and logistics facilities, etc. at or near the airport. LatAm airports were typically owned by an indifferent government before being privatized. There was no profit incentive to maximize efficiency at these assets previously. Long story short, monetization gets way better when a hands-on management team is overseeing things compared to an indifferent government official.

As mentioned, Sureste generates about a 65% EBITDA margin on the core Mexican airport biz. This means it generates a large and ever-growing amount of free cash flow each year. This can be used in three ways, all of which are good for us shareholders.

First, Sureste can reinvest in existing airports – new terminals, runways, shopping areas, etc. The appeal there is obvious, build a new retail wing, revenues go up. And it’s even cleaner than that, as the Mexican government and Sureste reach a new development plan/tariff agreement every five years where Sureste agrees to a set amount of growth CAPEX, and the government rewards Sureste with a rate increase for each passenger that uses a Sureste airport. So, Sureste generates a contractually generated return on investment on the aeronautical (regulated) side of the business, in addition to having uncapped upside on the non-aeronautical (hotels, shops and restaurants, advertising, etc.).

Sureste is doing more than a billion in annual EBITDA nowadays. There’s no way to spend $1 billion per year on making the Cancun airport nicer. So, that leaves plenty of cash for other matters.

The second main use of funds is in buying additional airport concessions. Sureste’s core nine Mexican airport package has a term which runs through 2048 (likely to be extended to 2098). Investors have logically wondered what will become of Sureste once the Mexican concessions eventually reach their end. Thankfully, there’s an easy way to answer that: Buy some airports outside of Mexico.

Sureste’s first venture outside of Mexico was buying a majority stake in the San Juan, Puerto Rico airport. It followed that with the purchase of six Colombian airports in 2018, including the flagship Medellin International (Rionegro) Airport. And then, the biggest success came late last year, with Sureste buying 20 airports from Motiva at a bargain bin price. More on this in a minute.

Sureste has not been able to use up its free cash flow from purchasing other airports, either. For example, it paid less than $250 million for the six Colombian airports, incredibly enough (the Korean sellers there got taken to the cleaners).

As such, this leaves Sureste with lots of cash for dividends. In addition to the regular dividend (yield often in the 3-4% range) Sureste can pay special dividends. In 2025, Sureste mailed out a $26 per share special dividend check (nearly 10% of the market cap!).

Management did this because it wanted to reduce the excess cash on its balance sheet, and improve the firm’s return on equity going forward.

It’s extremely rare when you see this level of forward-thinking and smart financial acumen at an emerging market company. Be grateful and latch onto these sorts of skilled managers when you find them in a market such as Mexico.

Which leads nicely into my next point; the Mexican airports have utterly demolished their competition, the Mexico ETF (NYSEARCA:EWW), since the airport stocks IPOed in 2006:

I don’t know about you, but I’d rather make 1,300% as opposed to 150% if those are my two options.

Owning Mexican airports is “the easy button” if you want or need exposure to Mexico. There’s no need to buy any other stocks in Mexico unless you already have the airports covered and want to diversify beyond the country’s three best companies.

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“But Ian, isn’t this outperformance due to multiple expansion?”

Good question, but no. Not at all. In fact it’s the opposite.

The Mexican airports traded around 14x EBITDA on average in the 2010s. Then you had the combination of Trump, AMLO (Mexico’s left-wing prez elected 2018), and then the pandemic, which put the airports in the penalty box. They traded down to 7x EBITDA at one point and are still around 9-10x today. The stocks need to rally about 40% from here simply to get back to historical average valuations.

Rather than multiple expansion, the airport stocks are screaming higher because they keep compounding EBITDA at 15%/year like clockwork.

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There’s a good argument for buying all three Mexican airport operators, Sureste, along with Centro Norte Airports (NASDAQ:OMAB) and Pacifico Airports (NYSE:PAC). I have large positions in all three stocks, along with Argentina’s Corporation America Airports (NYSE:CAAP) which primarily operates concessions in Argentina, Brazil, Uruguay, and Italy.

I’ve continuously owned all these stocks dating back to at least 2019, with my initial PAC and OMAB shares going back to 2016. They all keep compounding and becoming a larger and larger chunk of my overall portfolio. Own them all, enjoy the dividends, don’t worry too much about it. Perfectly valid – the airports are fine “set and forget” logistics assets that can keep delivering 15% annualized returns as far as the eye can see.

But, some people want to trade more frequently and shoot for the timeliest opportunities rather than taking the hands-off compounder approach.

I am happy to help with the trading angle as well. That gets back to Sureste, and why it’s the most compelling airport stock for the remainder of 2026.

Why Sureste Is My Top Airport Pick For The Rest Of 2026

To do that, let’s run through the company’s assets and why the market is missing the near-term opportunity here.

Traditionally, analysts have thought about Sureste as “The Cancun Airport Company”. Cancun generates two-thirds of the company’s total Mexican airport traffic. Cancun handless more than 30 million passengers a year, and the next biggest Sureste Mexican airport, Merida, is at 4 million. That’s quite the drop-off.

I was uncomfortable with Sureste back when it was just a pureplay Cancun bet. That’s because tourist airports can be fickle. Consider that Acapulco used to be the biggest Mexican tourist destination 30 to 40 years ago. Now Acapulco barely ranks inside Mexico’s 25 busiest airports. If you had hypothetically bought the Acapulco Airport Company in the 1970s, you’d have gotten poor long-term returns.

Tourist patterns change. Hot destinations can go out of favor. Also, criminals tend to catch up with where the money is. Over the years, Acapulco became overrun with cartel activity and so on. Now Acapulco is a budget destination for middle-class Mexicans rather than a spot for international jetsetters.

In other words, Cancun is still far and away the most popular tourist destination in Mexico today. But will it be in 2046 or 2056? Who knows. I could make an argument that destinations like Puerto Vallarta and Cabos (both owned by Pacifico Airports) are starting to gain meaningful mindshare compared to Cancun. Cancun’s crime rate is rising, and there’s also an increasingly intractable seaweed problem that is scaring off some tourists.

Additionally, the Mexican government rudely built a new Tulum airport which competes with Cancun to an extent (it’s 70 miles away, so not next door, but close enough to put a small crack in the geographic monopoly). Bottom line, Cancun is already a 30 million passengers a year asset, and I doubt it gets all that much higher. Whereas, say, Sureste’s Medellin is a 15 million passenger a year asset that could become 30-40 million over the next 20 years. If you’re skating to where the puck is going, Cancun ain’t it. But, on the other hand, 30 million PAX is a huge number, and Sureste can keep milking that at 65% EBITDA margins for many years to come – and ASR has plenty of other tools at its disposal to drive future growth.

Next up is San Juan. Puerto Rico had been out of favor for many years due to a poor local economy, and then the downturn worsened thanks to two devastating hurricanes. As much as 30% of Puerto Rico’s population migrated to the mainland United States over the past 25 years. Not surprisingly, San Juan airport traffic stalled out for as many PR natives booked one final flight to leave Puerto Rico and never came back.

However, the island is now enjoying a recovery. Many wealthy people have moved there due to Puerto Rico being an effective tax shelter for high-earning Americans. As more hedge funds, entrepreneurs, and remote workers relocate to Puerto Rico, this is infusing the local economy with new vigor. Aside from the rich American tax shelter angle, Puerto Rico is also benefitting from a renewed uptick in its tourism sector. All this to say that San Juan traffic has quietly started climbing again. SJU first handled 10 million passengers in 2005; it wouldn’t go on to surpass that figure until 2023. But, in 2025, the figure climbed to nearly 14 million, showing that after two decades of stagnation, San Juan is suddenly an attractive asset again, and it brings a nice growing stream of USD-denominated revenues.

Next up, Sureste bought the rights to operate six Colombian airports, including the flagship Medellin International Airport. Sureste bought these for less than $250 million, an incredible price which it got thanks to a prior absentee ownership group that had put nothing into the assets and let profitability massively erode.

Sureste has since renovated and expanded the airports (my local ASR-run airport, Monteria, Colombia, is now twice its old size and is now capable of handling international flights, to give one example).

My older daughter watching our plane arrive at Sureste’s Monteria Airport a couple years ago.

The most prominent work, though, was in a major overhaul at Medellin International (Rionegro). Sureste helped fund a tunnel from the airport to Medellin city, cutting transit time by more than half, and thus making Medellin far more attractive to discount carriers offering quick weekend trips to Medellin residents. Sureste also added more attractive restaurants and concessions at the airport, helping drive more revenues per passenger.

These overhauls have also made Medellin more competitive against the overcrowded and fairly blasé Bogota airport. This matters when airlines are deciding where to add capacity within Colombia – do you want to put more strain on the already overbooked Bogota airport, or take advantage of the greatly improved facilities at Medellin? We see a practical example of this playing out thanks to the reopening of the neighboring Venezuelan aviation market – Medellin is successfully setting up various new Venezuela routes this year. Investments and infrastructure matter, and Sureste has a proven track record in terms of making its airports more attractive to airlines and passengers.

The Colombian airports have been an excellent turnaround story. Sureste has raised EBITDA margins close to 1500 basis points since taking over this airport package.

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However, the market is still not valuing Medellin or the other Colombian airports very highly. This is a mistake, and here we find one of the catalysts that will power ASR stock higher.

Specifically, Sureste (via its Colombian subsidiary Airplan) has a relatively short concession life with their concession set to expire by 2032 (exact date is when the contracts hit certain levels of guaranteed profitability).

Obviously, the asset doesn’t have all that much value, even though it’s highly cash flow generative today, if the cash stops within the next six years.

That said, the government and the Medellin airport authority have agreed on a plan that would increase the airport’s capacity from 17 million passengers annually today to more than 40 million going forward. The government wants to build a second terminal and runway at MDE, but said government has not allocated funding for this. So, where is the money going to come from?

The most logical option would be for the government to extend its contract with Airplan/Sureste and have Sureste fund all the needed new terminals, runways, access roads, etc. Colombia’s federal government is currently running unusually large budget deficits thanks to President Petro’s free-spending ways.

Additionally, I believe the incoming Abelardo de la Espriella administration has other financial priorities which will supersede funding the MDE airport. It’s much easier to maintain the status quo and have Sureste pay for it rather than having the airports revert to government control and thus becoming the state’s CAPEX problem.

Sureste has recently agreed to put more money into MDE (and other Colombian airports), though not on the scale necessary to build a new terminal/runway. But, if Sureste thought it was going to lose the airports by 2032, I doubt it would be reinvesting here now. Read between the lines, I think a contract extension is coming.

We’re seeing a similar process play out with the Bogota (El Dorado) Airport, whose concession is expiring within the next couple of years. Odinsa, part of Colombian industrial conglomerate Grupo Argos (Bogota:GRUPOARGOS), is the concessionaire there. Despite the contract being near expiration, Odinsa is pumping a ton of money into a new Bogota airport expansion, and I’d presume that Odinsa will be rewarded with a fresh concession for operating said asset.

The Colombian assets aren’t the central focus of this piece so I’ll cut to the chase. I think Sureste will continue operating Medellin for many years to come, and this will eventually be a 30 million+ PAX asset, perhaps even overtaking Cancun in importance.

Don’t forget that Colombia’s presidential election concludes June 21^st, with pro-biz Abelardo de la Espriella set to become the country’s next president. I believe he’ll be open to doing business with concession operators, whereas the current government has been giving trouble to this sector (private toll road operators including Grupo Aval’s (NYSE:AVAL) infrastructure arm have been particularly negatively impacted over the past couple years). Sureste offers another good example in how the new Abelardo government will be bullish for pretty much every Colombian asset with an attached stock ticker. But I digress.

Sureste Buys Two Big Assets At Great Prices; Market Shrugs

With that, we can get to the two new assets which just joined the Sureste family in 2026 and are not at all reflected in the stock price ... yet.

The first of these is Sureste’s U.S. airport retail business. The company bought the rights to operate concessions at several large U.S. airports including, most notably, New York City’s JFK Airport, along with LAX and Chicago O’Hare. Yes, when you buy a sandwich at JFK, you are helping fund ASR’s future dividend payments.

Sureste bought these airport retail rights from a shopping mall operator that has been reducing its overall exposure to the U.S. market. The seller seemed not especially worried about valuation.

We don’t have exact full year annualized revenue yet as this asset has been part of Sureste for less than a month as of when the company reported Q1 earnings. But, based on the limited period where Sureste has operated its U.S. airport retail, we’re looking for at least $50 million of annualized EBITDA off this. At Sureste’s purchase price, it appears they paid a mid-single digits multiple.

And, keep in mind, this is before the new JFK terminal opens in H2 2026. So, there will be near-term upside to the business.

Management has said the existing U.S. airport retail business will serve as a beachhead for buying more American airport assets and facilities. It sees attractive valuations and likes having more revenues coming in based in U.S. Dollars.

To address a possible concern, it’s worth highlighting that airport retail is much more attractive than shopping mall retail.

I get that they probably seem similar from the surface. But, as an airplane passenger, you are trapped at an airport until your flight takes off. If you want something, you can’t order it from Amazon or Doordash. People are also less price sensitive on vacation as opposed to at home where they know what things “should” cost. This is doubly true for wealthy foreign tourists that usually think in Yuan, Yen or other foreign currencies rather than dollars; you have far more pricing power at an airport shop than you do at a mall where anyone can just order from Amazon if they think your price is too high.

You also have unique factors like the appeal of duty-free shopping, and the fact that many people buy things at airports as gifts for their friends or business colleagues. I’d be the first to tell you that U.S. shopping malls are an unattractive asset class – but don’t let that tarnish your view of airport retail. It’s a different animal.

To the extent that investors and private equity view U.S. retail and associated REITs as unattractive things to own, this creates the opportunity that Sureste can buy more airport concession assets at unusually low valuations.

This allows Sureste to engage in what is essentially multiple arbitrage. Buy airport assets at a mid-single digits EBITDA, and then they get valued at Sureste’s current 9x EV/EBITDA multiple (and historically, the average for ASR stock is closer to 14).

While the U.S. commercial airport biz isn’t a huge chunk of the business, it’s another sign that management are shrewd capital allocators and have demonstrated this new method of creating shareholder value and buying mispriced assets. I expect Sureste to buy more airport retail and operational assets when they get the chance. And, from day one, this new business adds a nice chunk of USD-sourced cash flow to the overall mix.

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I’ve been saving the best for last. Sureste got a steal when it bought Motiva’s 20 airport concession package earlier this year.

Last fall, Sureste announced that it intended to buy the Brazilian company’s concessions without disclosing a set price. At the time, I speculated that Sureste would pay between 12.5x and 14x EBITDA. That would have been below what airport concessions tend to change hands at in the private market (closer to 20x) in change of control transactions. That said, Brazil deserves a discounted multiple compared to many other international markets. And also Motiva’s stock price has been stuck in quicksand for many years now and activists have been demanding changes. So I figured Motiva would be a motivated (sorry, I couldn’t help myself) seller.

That said, even I underestimated Motiva’s willingness to cut price to get a deal done. Motiva ultimately sold the airports to Sureste for just 10.5x EBITDA. Motiva’s stock price (see below) is now below where it was when it announced the transaction, indicating that its shareholders aren’t thrilled with the outcome, either.

In any case, Sureste got a home run buying Motiva at this multiple. It’s an excellent opportunity to deploy a bunch of capital all at once at an attractive ROI across a diversified set of airports.

What did Sureste buy specifically?

Sureste got more than a dozen Brazilian airports. By far the most important is Belo Horizonte. BH is the fourth largest airport in Brazil with more than 10 million annual passengers (trailing only Rio, Sao Paulo, and $CAAP’s Brasilia). Besides BH, the rest of the Brazil airport package is not notable. The remainder are regional airports that handle domestic flights and don’t have much international traffic or potential to generate large ancillary revenues. But, the BH airport is a great piece and becomes Sureste’s third-most important airport overall. (The overall ASR top five is now Cancun, Medellin, BH, San Juan, San Jose)

Belo Horizonte is a large city with a strong industrial base and relatively affluent residents that should be able to support more high-value international routes over time.

Arguably the biggest appeal of the Motiva package is the depth of what’s included. In addition to BH and the broad array of regional Brazilian airports, we also get three other international properties: Curacao, San Jose (Costa Rica), and 46% of Quito (Ecuador).

None of these, in isolation, are total gamechangers for Sureste. However, in aggregate, they are another solid pillar for Sureste’s portfolio.

San Jose is particularly interesting. It serves more than six million passengers a year (+30% since 2019). And, as you probably know, Costa Rica is the wealthiest country in Central America; it’s also the most stable politically. Furthermore, there’s a ton of U.S. and Canadian retirees that live in Costa Rica. The Costa Rican government is heavily invested in driving tourism and retirement expat immigration. So much so that the Costa Rican government offers a subsidized university program for teaching hospitality and tourism management to its young citizens, ensuring that hotels and restaurants are staffed with professional English-speaking employees.

In other words, Costa Rica has bet the farm on tourism, and the San Jose airport is the overwhelming source of said tourism arrivals in the country (yes, Liberia, CR has an airport that is closer to Pacific beaches, but that airport serves just 2 million PAX a year vs. nearly 7 for San Jose).

Bottom line, the Costa Rican government is highly motivated to make our San Jose concession work and keep bringing in more of those tourist and retiree dollars that drive their economy. And because the traveler mix is so tilted toward American and Canadian retirees, there’s more purchasing power for shopping and otherwise spending money at the San Jose airport compared to your average LatAm property.

By contrast, Curacao is not a high upside asset. But hey it’s a Caribbean Island. Not too many ways to get to an island country, after all. Curacao does about 2.5 million passengers a year, and intriguingly enough, nearly half that traffic comes from Amsterdam (it was a longtime Dutch colony, after all). For what it’s worth, Curacao is less than an hour from Venezuela, and with that market reopening, we could see a lot more activity on those flights in coming years.

Finally, the Motiva package includes a 46% stake in Quito’s newish (built 2013) international airport. Quito is Ecuador’s political capital, so you get the usual diplomats, politicians, etc. though arguably the port city of Guayaquil is more important to Ecuador economically. And, unfortunately for Sureste, many of the flights going to Ecuador’s Galapagos Islands leave from Guayaquil instead of Quito. (Guayaquil is a CAAP airport. Like the game monopoly, if you collect all the airport stocks, you win regardless of where the passengers fly)

In any case, Quito is not a huge traffic magnet at this point – it does about 5 million a year in passengers, so a little over 2 million proportionally to Sureste given the minority ownership. You could argue that Quito is due for an upswing thanks to its far-right “Bukele-lite” president, the young and charismatic Daniel Noboa. If you’re an Ecuador bull, maybe it turns into another retirement hotspot a la Costa Rica and traffic blasts off. Quito is a new modern airport with Avianca there as significant player. But, I’m not counting on this being a big chunk of Sureste’s growth profile. That said, Ecuador uses USD as its currency, and investors always appreciate another source of hard money revenues.

And, in total, these three international (CR, Curacao, Ecuador) airports add more than 10 million additional passengers while further diversifying currency and political risk. At this point, it’d be foolish to still think of ASR as just the “Cancun Airport” company. Whereas before everything was highly-tied to Cancun’s fortunes and the outlook for the Mexican government and MXN Peso, now, Mexico will be well under half of overall revenues going forward. There’s a chunky USD set of revenues between Quito, Puerto Rico, and U.S. airport retail arm. And you have political upside from the new Colombian government and, fingers crossed, perhaps a new pro-biz government in Brazil this fall as well.

Sureste: Proven Growth Machine With 25% EBITDA Bump Coming This Year Trading At Discounted Multiple

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• Keiko Fujimori is set to narrowly win Peru’s presidency, providing regulatory and political stability.

• Fujimori’s victory is not a sweeping pro-business mandate. But it does offer relief from regulatory risk, particularly benefiting our AUNA position.

• With Fujimori in Peru and Abelardo winning in Colombia, around 70% of AUNA’s revenues are derisked…

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• My preview, prediction, and market impacts for this weekend’s Colombian presidential vote.

• AUNA: Market hasn’t (yet) rewarded company despite strong earnings and accelerating operational momentum.

• The recent recovery at Bruker and life sciences companies and why I remain bullish.

• On China, emerging market risk, why I own Kaspi but not Chinese FinTec…

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• Update on the Colombian election and my thoughts on local assets such as Grupo Aval.

• Corporacion America Airports reported stellar Q1 results, with EPS nearly doubling. The company will also start paying dividends soon.

• Buy-and-hold portfolio: I made May purchases on Friday as there is significant value available at the moment.

Short supplemental ed…

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• Inter (INTR), Nu Holdings (NU), and MercadoLibre (MELI) are in meaningful drawdowns. I am bullish on all three at today’s prices.

• I explain the macroeconomic and Latam political risk factors that have caused the sudden correction in the region’s equities.

• INTR posted 38% revenue growth, record 15.5% ROE, and trades at 7.5x forward earnings; I significantly increased my position following Q1’s sell-off.

• MELI delivered 51% revenue growth but faces margin compression from aggressive reinvestment; valuation is near lifetime lows despite accelerating fundamentals.

• NU reported 53% revenue growth, improving efficiency, and the first quarter of profitability in Mexico.

This piece is a combination three-in-one earnings review and discussion of Inter (NASDAQ:INTR), Nu Holdings (NYSE:NU), and MercadoLibre (NASDAQ:MELI).

These are three distinct businesses with different business models, growth strategies, and valuations. But, for the time being, the market is treating them as if they are all essentially the same company, the stocks have been trading in a highly-correlated fashion for months now.

As such, there’s a few high-level topics to discuss that are driving the overall LatAm FinTech/E-commerce space. And then we’ll drill down into the company-level specifics and earnings results for each of the three featured companies.

LatAm Stocks Take A Breather

The first thing to note is that we’re seeing a region-wide pullback for Latin American stocks. If you own companies with an HQ in LatAm, their stock has probably dropped over the past couple of months.

Perhaps that’s not all that surprising.

Latin America was absolutely on fire last year with Mexico, Brazil, Peru, Colombia, and Chile all posting 50%+ gains in U.S.-dollar terms. After those sorts of massive moves, you’re going to get a correction or profit-taking sooner or later. If you zoom out, going back to the start of 2025, these markets are all up a ton, even with the recent 15-20% dips:

One key factor likely driving the current pullback is that Latin America has almost no exposure to AI as a factor. LatAm has very little in the way of pureplay tech companies that clearly benefit from AI adoption -- and while there’s a decent semiconductor sector emerging in Mexico, there’s no AI-driven tech name in the Mexican index (let alone the South American countries) that would cause LatAm stocks to ride the current AI euphoria.

See my piece on market dispersion within the S&P 500 from last weekend. I discuss the factor trade there in more detail. Long story short, LatAm stocks -- even hypergrowth ones like MELI, NU, and INTR -- are being penalized for not being in the AI basket at the moment.

The onset of the Iran War and the attached uptick in inflation is also roiling emerging market stocks. EM consumers (tend to) have less margin of safety in their budgets, and it’s understandable that developed-market investors are selling at the first signs of a potential global economic contraction. I think that’s probably not the right kneejerk reaction, especially for countries like Colombia, Brazil, and Argentina that can directly benefit from higher energy prices. But, until we see actual spending data and consumer credit risk metrics, it’s understandable why EM is giving back some of 2025’s gains given the Iran issue.

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However, arguably the biggest concern is that we’ve seen a significant uptick in LatAm political risk over the past quarter.

Up through about January 2026, we appeared to be enjoying a broad right-wing wave across most of Latin America. In 2025 alone, we saw conservatives win by much larger-than-expected margins in Chile’s presidential, Ecuador’s presidential, and Argentina’s midterm congressional elections. I mean, conservatives even won an election in Bolivia -- and that never happens.

In the most important of those elections, Chile, far-right Jose Antonio Kast absolutely trounced his opponent, winning by 16 points and thus emphatically ended that country’s recent left-wing experimentation. Against that backdrop, it seemed logical enough to come into 2026 with relatively high expectations for this year’s presidential elections in Colombia, Peru, and Brazil, respectively.

That said, it simply isn’t playing out that way -- or at least it doesn’t appear to be.

As this publication started warning in March, something dramatically changed in the Colombian election early this year. Conservative support has significantly faded since January.

As of this writing, it appears that conservatives will eek out a tiny victory in Colombia’s presidential vote in June. But, I wouldn’t be surprised if the conservatives ultimately only win the run-off by 2-3 points. Whereas, coming into 2026, I was expecting Colombia’s conservatives to win comfortably.

They were up against an uncharismatic heir of a socialist president with a 30% approval rating. Voters are mad about the economy, they’re mad about crime, and they think Petro’s government failed in achieving basic governance tasks. Any normal right-winger should have won this 2026 election with ease.

Instead, incumbent president Petro’s approval rating has now surged 15% in recent months, and the left-wing candidate for the upcoming election, Ivan Cepeda, is in the low 40s odds of winning the presidency according to the betting markets. Like I said, I think Colombia ultimately goes for the right-wing, but it will be by just a whisker. At best, this election was unnecessarily close, and there’s still a live shot that the pro-business result gets fumbled away entirely.

In Peru, pro-biz candidate Keiko Fujimori is only a modest polling favorite over a left-winger despite a relatively favorable pre-election landscape for the conservative forces in that country.

And, of the most importance for today’s stocks, Brazil looks to be fizzling altogether. The right-wing consolidated its support around Flavio Bolsonaro, a political lightweight whose primary justification for being a presidential candidate is that he’s the son of former president Jair Bolsonaro.

This week, Flavio got caught up in a scandal as it emerged that he apparently asked for tens of millions of dollars from a jailed banker to produce a documentary film project about his father. The banker’s institution committed fraud and allegedly robbed hundreds of millions of dollars from government pensioners among other victims. Needless to say, it’s not a great look that Flavio was taking $25 million of that money to pursue his moviemaking interests.

The Brazilian equity market and currency tumbled after those allegations emerged; the Brazil ETF (NYSEARCA:EWZ) fell more than 7% last week. Keep that in mind when looking at the performance of something like Inter or Nu on earnings, as these stocks were -- by default -- likely to trade lower given the domestic political storm.

On the betting markets, just over the past couple weeks Flavio has sunk from 50% odds of winning the presidency to 30% now, with some of that support filtering to other right-wingers that might enter the race if Flavio is forced to drop out.

Regardless, with his main opponent reeling and no clear alternative for conservatives to unite around if Flavio departs, that has consolidated the incumbent’s position. While Lula’s socialist economic policies have failed to jumpstart the Brazilian economy in recent years, his approval rating has bounced back up to the mid-40s. And he has survived numerous other setbacks along his long political career. I’ve been nervous about Lula potentially getting re-elected for months now, and with Flavio’s stumbles, I think it’s fair to say the socialists are now outright favorites to win Brazil’s election this fall.

While there aren’t elections in Argentina this year, it’s also worth noting that President Milei’s approval rating has plunged 20 points year-to-date. For whatever reason, right-wing presidents have lost a lot of traction in Latam this quarter (President Kast in Chile is already significantly underwater as well just months after inauguration).

Of note, Milei is the most polarizing figure in LatAm politics right now and his stock is plunging. To the extent that hard-right candidates like Abelardo de la Espriella in Colombia are running as the Milei of [their country], this is suddenly becoming a more problematic campaign tactic.

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To be clear, I’m not calling a “peak” or definitive end to the right-wing LatAm conservative wave. This theme still looked healthy as recently as January. It’s possible that this is just a one-quarter stumble and LatAm conservatives will regain the political initiative later this year. I wouldn’t be surprised if things start to stabilize if/when the Iran War draws to a close.

But, for whatever reason, the current winds are blowing very much in the liberal and socialist direction. And, in a (multiple) election year where a lot of LatAm stocks were sitting on big trailing 12-month gains, it’s not surprising that traders are moving to lock in some profits amid a sudden change in the political weather.

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I want to reiterate that individual stock and sector selection matters. LatAm equity isn’t a monolith asset class.

We’ve seen LatAm firms such as the airport operators, consumer names, and the FinTech companies all perform tremendously over the past decade. That’s been during both left- and right-wing administrations around the region. MercadoLibre, in particular, has been an absolute growth machine hailing from Argentina despite Argentina being wracked by triple-digit inflation and utterly failed governance for much of the past 25 years.

Simply put, a world where Lula remains president of Brazil and Petro (or Cepeda) is president of Colombia is one in which airport operators, e-commerce apps, and FinTech names can still make us a bunch of money. The same might not hold, however, if you are betting on LatAm via names such as state oil companies or junior mining firms. (A perfect example of this is Mexico, which is one of the strongest equity markets in the region right now, despite having a staunch left-winger, Sheinbaum, as president. If you own Mexican domestic economy names, those holdings have treated you well over the past year. But if you bet on something politically-exposed like Mexican lithium or copper explorers, things have not necessarily been as rosy.)

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The bottom line is that NU, INTR, and MELI have all thrived historically despite operating under primarily left-wing governments. If we get a decade of solidly right-wing pro-business governance across the region, that’d be a wonderful cherry on top of the bull case. But it’s not necessary for these stocks to work from current prices. Even if we assume left-wingers win all three of this year’s important presidential elections (Colombia, Peru, Brazil), I’d be happy to hold my positions in these three names.

But, given the AI factor trade, the profit-taking we’re seeing in EM stocks, and the rising political risk in LatAm, every local company reporting earnings in Q1 is getting more scrutiny than they would have last year. Which has led to sell-offs on what are objectively solid numbers.

I’ve said enough on political risk, let’s get to the good stuff.

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Inter: I Bought A Lot More This Past Week

As a final higher-level point, a word on credit quality since it is a central concern for all three companies being discussed today.

Keep in mind that Q1 is traditionally the weakest quarter within LatAm for credit growth and quality metrics. There is a seasonal effect related to Christmas shopping across many countries. However, it is more pronounced in Latam for various reasons, such as requirements in some countries that employers pay staff a year-end bonus worth as much as one month’s salary on top of their usual December paycheck.

In any case, Q1 is the weakest one in LatAm credit, and no surprise, Q1 numbers came in softer again this year.

With that established, we can jump into Inter’s results. My recent write-up on Inter if you are unfamiliar and want the backstory:

The quick summary is this is a large Brazilian all-in-one banking platform serving more than 40 million customers in that country. It has been growing like a weed, and inflected to profitability in late 2022. ROE is up from 1% in Q1’ 2023 to 15.5% in Q1’ 26 (a new record high this quarter) and management has a roadmap for getting to a 30% ROE over the next couple of years.

Meanwhile, the company continues to grow at a rapid clip, posting 38% top-line growth this quarter. Margins are also rising, as the company kept cost growth to 20% even while nearly doubling that in terms of revenue increases. The company is now trading at less than 7.5x forward earnings with that falling to 5x based on 2028 numbers:

I could go more into the bull pitch. There’s imminent international expansion, increasing uptake of the firm’s other products (wealth management, insurance, loyalty rewards, etc.), and so on.

If management simply keeps executing on its existing plan, let alone hits its ambitious intermediate-term targets (60 million customers, 30% ROE, 30% efficiency rate), the stock is an easy multibagger from here.

So, the focus should be on the downside. What could go wrong, and why is the stock available at this price?

As a reminder, INTR was trading as high as $10.25 earlier this year. I wrote it up as a long at about $7.75, and now it’s at $6. So, it was already in a solid pullback heading into the Q1 numbers and then the market totally puked it after that.

What has gone so wrong to justify the greater than 40% pullback in three months?

According to the bears, it’s the non-performing loans “NPL”. Here’s a chart of Inter’s NPLs compared to Brazilian consumer lending peers, updated through Q1 results for everyone except Nu which was last to report of the bunch:

You were probably expecting some sort of disastrous chart, but this is the best bear case I can give you. The market is apparently absolutely freaking out a 60 bps rise in NPLs back to where they were in 2023 -- with Inter’s yellow line right in the middle of the Brazil peer group.

As a reminder, NPLs typically go up in Q1 across the Brazilian banking system, rather than being an Inter-specific phenomenon. If NPLs keep going up from here in Q2, then we might have some sort of issue. But this sort of post-holiday seasonality is nothing out of the ordinary.

It’d be a fair counterpoint to say that NPLs are a bit higher this Q1 than in Q1 ‘25 or Q1 ‘24 (though on par with Q1 ‘23). But we’re talking a tiny bit of noise in the grand scheme of things considering the interest rates Inter lends at on average, compared to the actual write-offs it takes against its book.

And, in fact, Inter’s management appears to be doing a good job with NPLs being where they are now. That’s because the company has put more yield in the portfolio; Inter raised its overall average lending yield by nearly 300 basis points year-over-year. And while doing so, NPLs were up only modestly.

Specifically, in addition to more credit cards, Inter also launched a new payroll-based lending program. And, prior to the release of the Q1 numbers, management had disclosed some initial hitches in this lending program and noted that they have adjusted underwriting on the payroll product to improve performance going forward. It’s surprising that the market would punish Inter to this extent for a modest hiccup in a new product line that was already being addressed.

Furthermore, these payroll loans are collateralized – as is most of Inter’s lending. 70% of Inter’s loan book, in fact, is in secured lending. So, even if you assume Lula wins reelection, the Brazilian economy tumbles, something goes wrong geopolitically or whatnot, Inter is not taking nearly as much specific credit risk as investors probably imagine (most Fintechs have little to no secured lending, rather than it being the majority of the biz at Inter)

EM investors are often willing to pay 8x earnings for a bank that has strong profitability metrics and is growing at, say, 5% per year. Inter, by contrast is at 7.3x forward earnings and has admirable profitability metrics. And it’s growing at close to 40% per year rather than 5%. There’s a reasonable debate around how much premium this sort of bank should trade for versus a legacy LatAm bank -- but the correct price is not a discount to a traditional bank like Itau (NYSE:ITUB), which is at 9x forward earnings today.

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Inter stock fell further on Monday following the prior week’s earnings release. This coincided with the company’s investor day. I saw frequent complaints that -- believe it or not – the company’s speakers didn’t have good enough English and that this was making shareholders nervous, especially ahead of Inter’s entry into the Florida (U.S.) banking market. Let’s just say that this is not the sort of thing people (or algos) usually care about when a stock price is going up; in fact, it’s probably a good contrarian signal.

There was also discussion on Twitter that Brazilian fund, Ponta Sul, was a forced seller of Inter following earnings. That fund, for those unfamiliar, appeared out of nowhere and rode concentrated bets (in Inter principally) to great success in the early 2020s -- taking their AUM up to billions at the height of Inter’s rally. They blew up in 2022 when INTR stock fell -- but are still in business now with a few hundred million left in AUM. Reportedly, they still had the majority of their assets in INTR stock and Q1 earnings may have been the straw that broke that camel’s back. Again, that’s chatter on Twitter rather than an official source -- and most of it comes translated from Portuguese, a language I don’t myself speak. So, take with a big grain of salt. But, in the event a significant holder got taken out on margin calls/redemptions, that can often be a good marker of capitulation and a potential turning point in the stock price.

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One other hidden component to the upside case is that Inter is a dividend-paying security and intends to return about 25% of its profits to shareholders. When the stock is trading at 5x projected 2028 earnings while growing EPS at a continued double-digit clip, this sort of dividend policy turns into a major income stream rather quickly. Here is Inter’s historical and projected annual dividend payments per share for the next five years based on the current analyst earnings deck out through 2028 and then using 15%/year EPS growth after that.

• 2024: 3 cents (actual)

• 2025: 8 cents (actual)

• 2026: 11 cents (actual)

• 2027: 20 cents (projected, 25% of 2026 EPS)

• 2028: 26 cents

• 2029: 30 cents

• 2030: 35 cents

• 2031: 41 cents (7% yield on Friday’s closing price)

• And so on...

I’m not buying Inter here primarily for the dividend – I think this will be a $15 stock within two years and could easily be $30+ over the next five. Capital gains are the main objective. But, I also anticipate getting back a sizable chunk of my initial investment rather quickly as the firm’s EPS ramps up and the associated dividend policy takes flight.

I bought a big chunk of Inter stock following Q1 earnings and it’s in my pile of favorite high-conviction names that I intend to hold for a decade+ (similar to how I have chunks of airport stocks that I bought many years ago and never sell). Happy to collect the rising dividend for many years to come.

If I add more INTR to the aggressive portfolio (which is more trading focused in nature rather than buying stuff at great prices which I can subsequently stick in a vault and let compound without much further thought) that would be a separate transaction, and I’d write about it accordingly. But, just know that $6 was a cheap enough price that I personally got excited and greatly increased my positioning here.

MercadoLibre: Market Punishes The Firm For Growing Too Quickly

MercadoLibre is widely described as the “Amazon of Latin America”. That’s not a perfect analogy; MercadoLibre doesn’t have anything like AWS, and MELI is much more interested in FinTech than Amazon. But, in general, there’s some directional merit to the comparison.

And, in one way, it fits perfectly. Throughout Amazon’s long growth trajectory, the stock’s valuation has often swung around based on how investors feel about CAPEX spending vs. current-year profitability. As long as Bezos was at the helm, Amazon stayed in “Day One” mode. The heavy investments needed to keep Amazon growing at lightspeed, however, sometimes rattled investors who were worried about the near-term hit to profitability and free cash flow.

MercadoLibre follows in this mold. It grew revenues 51% (fifty-one percent!) in Q1 2026. This is a company that has been in business for more than 25 years and already does $40 billion annual revenues. It’s jaw-dropping that MELI can still post such otherworldly growth metrics at this stage of its development.

At a 51% growth rate, MELI will double in size every 18 months. Yet, the stock price hasn’t doubled in quite a while… in fact it’s dead flat dating back to year-end 2020:

Revenues are up from $8 billion to $31 billion since 2020, and EPS is up from a slight loss in FY’20 to $38/share of EPS over the past 12 months. For those gains, the market has rewarded MELI with no additional valuation whatsoever. Entry points matter, folks. Fortunately, we get to buy now, after this dramatic compression in MELI’s valuation metrics.

So, why are folks mad at MELI stock now?

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