It's not every Mexican airport that can go by the cuddly handle of "OMA" or "granny," but Grupo Aeroportuario del Centro Norte (Nasdaq: OMAB), known by its Mexican ticker symbol, is one. And who's to say it isn't hugworthy after the May traffic numbers reported last week?
For the month, OMA recorded a big increase in overall passenger traffic, 25.8%, year over year. Domestic traffic soared, increasing 31.8%, with the airport in Monterrey leading the way. This is already the group's biggest airport by traffic, and its growth is moving more quickly as well, increasing 27.2% overall, and domestic traffic shooting up 32.6%.
As I've mentioned in the past, this blistering pace is being set by new, low-cost air routes that OMA hopes will help displace some of Mexico's culture of long-distance bus travel. Clearly, things seem to be working out as planned.
The single fly in granny's ointment is the slight drop in international traffic. At least, unlike peer Grupo Aeroportuario del Sureste (NYSE: ASR), OMA doesn't depend as heavily on folks flying in from across the borders.
The biggest short term worry for OMA, by my watch, is economic. If the U.S. economy sneezes and Mexico catches a cold, that could put a damper on spending south of our border. It remains to be seen if the collapse of the housing bubble in the U.S. becomes a measurable drag on Mexico.
But I believe such concerns really are short term. The Mexican economy looks to me to be on more stable footing than we've seen in a long time, which is good news for many companies that deal in products that stand to see a rise in demand with a rise in affluence. Coca-Cola FEMSA (NYSE: KOF), FEMSA (NYSE: FMX), Gruma (NYSE: GMK), and Homex Development (NYSE: HXM) all come to mind.
Mexican stocks haven't exactly gotten cheap lately, but OMA still looks like an excellent buy for those with a long-term investing horizon, which is why I recommended it to readers of Motley Fool Global Gains about 21% ago. The company just broke ground on a $40 million expansion in Monterrey, a rapidly growing commercial center, to keep pace with that growth. If it can leverage the growing traffic into cash earnings, the stock will pay off for investors for some time to come.
At the time of publication, Seth Jayson had shares of ASUR and MEFSA, but no positions in any other company mentioned here. See his latest blog commentary here. View his stock holdings and Fool profile here. The Motley Fool has a disclosure policy.
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