Copa Holdings, S.A. (CPA)

JNMcLarty (< 20) Submitted: 9/25/07 10:55 AM : Start Price: $41.38 CPA Score: -3.07

While the growth in Costa Rica is over, the bubble in Panama is just getting started. The growth in Panama is why stocks like Copa Airlines should be on all our watch lists, and maybe even our buy list.





After a week and a half long trip, a colleague and I both came back bullish on Panama, for more than one reason, and in more than one market. It's literally being put on the map, Google just released coverage of the country's roads 2 weeks ago.





Panama is in the spotlight right now, and is growing for more reasons than one. Politics have been stabilized. Freshly paved blacktop roads are sprawling the country along with other major infrastructure changes. These are moves driven by history and the future. The US turned over the control of the panama canal back to Panama, and along with its >$500M per year in revenue, for the country's 3 million people, where 60% are living in poverty. Putting the canal's revenue in context, this is a place where a decent wage is $200US per month. So, this has given a large influx of money to the country. Looking to the future, plans to widen the canal are under way along with changes in taxes for foreign investors.





How big of deal is the widening? They declared a national holiday the week we were there to commemorate the project. Changes to the canal is a >$6 Billion dollar project scheduled to break ground in 2008, and last until 2014. This is going to bring engineers, architects, and all the support staff in droves. Not to mention approximately 140 new condo buildings with permits to break ground, similar to Donald Trump's new $260M investment. These 140 new condos are on top of the already existing field of ocean view skyscrapers spanning the horizon as far as the eye can see in Panama City. So, when these engineers have to get to Panama, there is no doubt they are going to fly. It’s a viable assumption, they will all have family to visit back home. So, guess who is the regional airline, who cited 15.8% traffic growth for August 2007? Copa Airlines.





http://www.copaair.com/html/user/default.aspx?PageId=53&lang=en

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