Billionaire Alan Howard Still Betting Big on Latin American Stocks; Here Are His Top Picks

#3 Pampa Energia S.A. (ADR) (NYSE:PAM)

– Shares Owned by Brevan Howard (as of December 31): 1.55 million

– Value of Holding (as of December 31): $31.86 million

Pampa Energia S.A. (ADR) (NYSE:PAM) is another Argentian stock in which Brevan Howard was betting big going into 2016. Though the fund increased its stake in the company by only 2% during the fourth quarter, Pampa Energia S.A.’s stock rose by nearly 35% during the same period. The stock has continued its bull run this year too, with year-to-date gains of 9.39%. However, despite these gains, analysts believe that the stock of the largest integrated electricity company in Argentina is still undervalued, with it trading at a forward price-to-earnings multiple of 8.89. Shareholders of the company recently approved its plan for raising $500 million in debt, raising speculation that it is gearing up to acquire the Argentinean assets of Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR). Israel Englander‘s Millennium Management initiated a stake in Pampa Energia S.A. (ADR) (NYSE:PAM) in the fourth quarter, purchasing 32,500 shares.

#2 Adecoagro SA (NYSE:AGRO)

– Shares Owned by Brevan Howard (as of December 31): 2.9 million

– Value of Holding (as of December 31): $35.93 million

Agro company Adecoagro SA (NYSE:AGRO)’s stock has been rising swiftly since the start of the fourth quarter, leaping by over 60% since then. Brevan Howard also raised its stake in the company by 10% during the fourth quarter, though Adecoagro SA (NYSE:AGRO) nonetheless fell from the top spot in the fund’s U.S equity portfolio. As in the case of Cresud S.A.C.I.F. y A., analysts believe that the agriculture-friendly policies being implemented by the new Argentinean government will be beneficial for Adecoagro SA (NYSE:AGRO), helping it raise its farming margins by 50% in the coming years. However, they also warn investors that a further plunge in Brazil’s currency could be detrimental for the stock. The ten leading analysts who cover the stock currently have an average rating of ‘Overweight’ on it, with an average price target of $13.90, which is pretty close to where the stock is currently trading.

#1 YPF SA (ADR) (NYSE:YPF)

– Shares Owned by Brevan Howard (as of December 31): 4.2 million

– Value of Holding (as of December 31): $65.9 million

YPF SA (ADR) (NYSE:YPF) emerged as Brevan Howard’s top stock pick going into 2016 thanks to the fund boosting its stake in the company by 80% during the October-to-December period. Like other stocks, YPF SA (ADR) (NYSE:YPF) also started 2016 on a dismal note, but its shares have been on a gradual rise since mid-January after the company announced that it signed a deal with American Energy Partners to jointly explore and develop unconventional oil and gas projects in Argentina. YPF SA is scheduled to report its fourth quarter earnings early next month and analysts estimate that it will report EPS of $0.68 on revenue of $4.05 billion for the quarter. YPF SA currently trades at a very low forward price-to-earnings multiple of only 7.92. Zach Schreiber‘s Point State Capital also increased its stake in YPF SA by about 80% during the fourth quarter, lifting its holding to 1.42 million shares.

Disclosure: None