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The following series marks my top ten positions for 2014. This marks the sixth annual list I have published on Seeking Alpha. Here is a look at returns over the last five years: 

2009: +99.9%

It’s hard Elite White C.J.Mosley jersey to believe that 2013 has come to a close. The year seemed to fly Authenitc White Dan Orlovsky jersey by and was another rewarding one for investors who followed by top ten stock picks for the year. Bet on Mexico

3. Beaten Down Shares

Fomento Economico, also known as Femsa, is a huge Mexican conglomerate that has all the Authenitc Mens Deandre Levy jersey right pieces to show investors growth in 2014. The Authenitc Mens C.J.Mosley jersey company operates in three major segments: Coca Cola Femsa, Femsa Comercio, and Heineken. Fomento owns OXXO, the largest convenience store in Latin America. After selling off its beer division, Fomento now owns 20% of Heineken.

There were 11,200 OXXO locations at the end of the third quarter. In the third quarter, the company opened 195 new OXXO stores. The company opens one new store every eight hours on average. The expansion of the OXXO brand is not complete. In Womens Barry Sanders jersey its home market of Mexico, OXXO is set to pass Organizacion Soriana as the number two retailer in Mexico in 2014, trailing only Wal Mart de Mexico.

In the third quarter, the Comercio business saw growth of 13%. Same store sales increased 1.6%, with higher average tickets offsetting less traffic. The Comercio segment is set for huge growth for Fomento. Through a series of acquisitions, the business segment should have a huge 2014 and could provide upside for Elite Womens C.J.Mosley jersey investors and offset any weakness the beverage unit shows. In 2013, Fomento bought stakes in two pharmacy companies: Farmacias FM Moderna (100%) and Farmacias YZA (75%). Through the two acquisitions, Femsa has over Elite Blue C.J.Mosley jersey 400 locations in Mexico. The two pharmacies are very regional and Femsa has plans to expand its Authenitc Blue Deandre Levy jersey pharmacy Womens Deandre Levy jersey presence nationally.

Femsa Comercio also acquired a quick service restaurant operator in Mexico. Femsa Comercio acquired an 80% stake in Dona Tota, a restaurant operator with 204 units in Mexico and one 11 units in Elite Kids Barry Sanders jersey Texas. One of Womens Barry Sanders jersey my favorite things about the Comercio segment is the idea of integrating new acquisitions within OXXO Elite White Barry Sanders jersey stores. During its recent third quarter earnings call, the company offered the following, “And I think that’s going to be heavily reinforced by the acquisition of Dona Tota, mostly in terms of the skills that we’re acquiring from this business and some of the cross sharing practices that between OXXO and Dona Tota are going to start as soon as we close the transaction.” Femsa also offered this up about its recent acquisition, “We think there are learnings from us participating in this pharmacy sector, as well as in the fast food offering that we can really leverage within the OXXO store.”

After Elite Mens George Johnson jersey opening over 11,000 locations in Mexico, Femsa plans on expanding the brand in Colombia, where it currently has 36 locations. Going forward, plans call for OXXO to enter Brazil after Colombia expansion is complete.

Femsa owns 48.9% of Coke Femsa (NYSE:KOF), while Coca Cola (NYSE:KO) owns the remaining 28.7% not owned by the public. Authenitc Youth Deandre Levy jersey Elite Mens C.J.Mosley jersey Coke Femsa has operations in Argentina, Brazil, Colombia, Mexico, Venezuela, Guatemala, Nicaragua, Costa Rica, and Panama. Back in 2003, Mexico and the Central America region made up 73% of Coca Cola Femsa revenue. In the last twelve months, that figure Elite Kids Barry Sanders jersey has dropped all the way to 46%. The company’s South America beverage segment now accounts for 54% of Coca Cola Femsa’s revenue.

That dependence on Mexico could fall even Mens Barry Sanders jersey Authenitc Mens Deandre Levy jersey further with recent deals in Brazil. Coca Cola Femsa acquired Spaipa SA Industria Brasilieira de Bebidas. The deal will increase the company’s volume in Brazil by 40%. Through recent acquisitions, Coca Cola Femsa will now reach 33% of Brazil’s population. With an upcoming World Cup (2014) Authenitc Blue Mens Haloti Ngata jersey Dan Orlovsky jersey and Summer Olympics (2016) in Brazil, Coca Cola Femsa may be expanding its South American presence at the perfect time.

The big negative surrounding Fomento is a recent decision by the Mexican government to levy a tax on carbonated soft drinks. The tax will consist of 1 peso per litre, an amount equal to about 8 cents in USD. It will be interesting to see what this does for sales of Coca Cola products in Mexico. The country ranks number one in consumption of Coca Cola beverages around the world. Mexicans consume 728 8oz portions in a year on average. The next highest country is Chile at 460 portions, so you can see how big of a lead Mexico has. The good news is Femsa operates and has strong positions in four of the top seven consuming areas of Coke products. Behind Mexico at number one is Panama (4), Argentina (5), and Brazil (7).

Despite this huge negative, I believe shares have extreme value going forward as other segments pick up sales growth and outperform. Mexico’s middle class shows signs of improvement and this company could be one of the biggest benefactors from growth in the country. Mexican beverages segment continues to make up less of Femsa’s total revenue than ever before.

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