This ‘Legal Monopoly’ Could Be Your Next Profit Machine
In a recent issue of StreetAuthority Daily, I told readers about one of the key traits that can tell you whether an investment if truly worth owning “forever”.
That trait is something I like to call an “Irreplaceable Asset.”
The idea behind Irreplaceable Assets is simple. Think about the types of assets companies own that competitors can’t easily duplicate… From buildings to airports to hydroelectric dams, there are dozens of Irreplaceable Assets you can invest in around the world.
And many of them are market-beating profit machines.
The best part about Irreplaceable Assets is that there are literally dozens of them around the world — and regular investors like you and me can invest in them. (Here’s a list of some of the main types of Irreplaceable Assets that my research team and I recently identified in my report “The 10 Stocks To Own For The Rest Of Your Life.”)
Irreplaceable Asset | Examples |
---|---|
Buildings | Empire State Building, Madison Square Garden |
Railroads | Union Pacific Railroad, Canada’s largest railroad |
Airports | Cancun International Airport, Mexico’s second-busiest |
Hydroelectric Plants | 195 in the United States, Canada and Brazil, to name a few |
Toll Roads | Thousands of miles of roads across Europe |
Pipelines | Hundreds of thousands of miles to oil hot spots like Permian Basin, Bakken shale formation and more |
Ports | Across Europe and China |
As you can see, there are buildings, railroads, even hydroelectric plants that are publicly traded. But there’s one Irreplaceable Asset, in particular, that is perfect for investors in search of a way to profit from one of the most powerful global trends shaping the market today — cheap oil.
#-ad_banner-#Crude prices have fallen more than 50% over the past six months to less than $50 per barrel. That’s down from as high as $110 as recently as July.
That’s a major boon for the airline and travel business.
And I think Grupo Aeroportuario del Sureste (NYSE: ASR) is one of the companies most likely to profit from this massive trend in the near future.
Grupo Aeroportuario owns and operates nine airports throughout Mexico — including in Cancun, one of the nation’s top tourist destinations.
As you can see in the chart above, Cancun International Airport is the country’s second-busiest. And because it owns one of the only airports around, ASR enjoys near monopoly profits from the droves of passengers constantly flying into the area.
That’s one of the reasons the firm has been reporting record profits for five straight years. And its share price has certainly followed suit, beating the market by nearly 3-to-1 over the past three years and by more than 6-to-1 during the past decade.
Thanks to low oil prices, conditions are ripe for the company to continue its trend of dominance and record-setting profits in the near future.
You see, about one-third of operating costs for airlines come from buying fuel. So it’s very likely that at least some of these cost-savings will be passed along to air travelers in the form of reduced ticket prices. And that could put Grupo Aeroportuario in exactly the right place at the right time if we begin to see a resurgence in international air travel due to lower flying costs.
Increased traffic should help bolster Grupo Aeroportuario’s bottom line, and with the company’s ability to enjoy near-monopoly control over travel into such a fast-growing region, 2015 is shaping up to be a booming year for this profit machine.
Grupo Aeroportuario is one example of an Irreplaceable Asset that is set to profit from lower oil prices. But in my most recent issue of Top 10 Stocks, I told my subscribers about another airport experiencing a surprising trend that could help it have a breakout year in 2015.
You see, the airport is located in the capital city of an island nation that is seeing a growing number of people traveling into the country.
Last year, visitors to the country from the United States rose by a stunning 11.1%. And the number of travelers from China has surged by an astounding 125% over the past four years.
What’s most impressive, however, is that the country has more or less one port of entry. So if you’re one of the growing numbers of travelers flying into the country, you’re almost guaranteed to travel through this airport.
And the company that owns that airport is poised for big success in the near future.
Management has projected total international travelers coming through the airport to rise nearly 30% — to roughly 10 million — over the next four years.
Growth like that should have a significant impact on profits for the company. After all, a mere 3.8% increase in overall traffic this year created a 21.3% jump in the company’s profits. And as you can see in the chart below, the airport’s profits have skyrocketed a total of 630% over the past five years.
If a few percentage points of growth in traffic can lead to double-digit profit increases, you can imagine what the projected 30% rise in traffic over the next four years could do to the company’s bottom line.
We’ve already seen this play out with Grupo Aeroportuario. The near-monopoly status from the airports that company owns is one of the reasons why the stock delivered a 750% gain over the last decade. If history is any guide, I think a similar situation could happen with this company.
Now, out of fairness to my subscribers, I can’t share the name of my latest pick with you today. But the good news is that Grupo Aeroportuario should continue benefitting from rising traffic at its airports, thanks to cheap oil and falling ticket prices from airlines.
Airports are just some of the near-monopoly Irreplaceable Assets I regularly track within my premium newsletter, Top 10 Stocks. If you’d like to get the name of my latest Irreplaceable Asset — the company that owns the airport I just mentioned that could follow the same path as Grupo Aeroportuario — then I encourage you to check out my brand new report “The Top 10 Stocks To Own For 2015.” In this special presentation, I’ll tell you about our just-released picks for 2015 – including several names and ticker symbols – so you can potentially start profiting from these ideas today. Simply go here to learn more.