Argentina, Undervalued with Strong Macro Catalyst Ahead

Originally published on SeekingAlpha.com on April 22, 2015

  • Argentina has been an outsider to the investment world for almost a decade. Market-unfriendly policy making has resulted in investor neglect for Argentinean assets.
  • Although suffering severe economical imbalances due to mismanagement, the economy has grown significantly while remaining relatively debt free.
  • International neglect and domestic indifference has resulted in deeply undervalued assets.
  • Positive economic policy making changes in 2016 are almost certain under all political scenarios and this may act as a catalyst for Argentinean assets.

Argentina has been an outsider to the international investment community since defaulting on its debt obligations in late 2001. Unable (and unwilling) to secure international financing since then, the country has grown significantly while remaining relatively debt free. Economic mismanagement, especially over the last 7 years, has resulted in severe imbalances as the fiscal situation deteriorated, public spending rose, inflation surged both in Peso and US dollar terms, and exports fell.

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