Mexican Airports Take Flight

There are two parts to the whole profiting from individual stock research thing that we preach here at the Fool. Finding good ideas, and following up. Let it be known that even official Fools behave like regular fools and forget about part two.

So, the recent good fortune for shareholders in Grupo Aeroportuario del Sureste (NYSE:ASR) is a reminder to keep on top of those watch list stocks. I didn't follow up on this operator of airports in Mexico, which came up in one of my stock screens for friendly foreigners, and since mid-December has tacked on about a 20% gain.

Basically, I was looking for companies that met the following criteria: a market cap between $100 million and $2 billion, an enterprise value-to-free cash flow ratio of less than 15, insider ownership of more than 5%, net margins growing over the past year, and American Depositary Receipts or American Depositary Shares available on major U.S. exchanges. Brazilian food giant Sadia (NYSE:SDA) and Italian eyeglass firm DeRigo (NYSE:DER) were two of the other notable finds.

Pretty loose metrics, yes, but they flagged Grupo Aeroportuario del Sureste, which looked like one of the most promising of the bunch. Sure, it had been on a long upswing already, but the double-digit passenger traffic increases continued -- and continue -- to roll in. Of course, it looks obvious in retrospect: Earnings were bound to keep improving, right? Results from travel bookers like Priceline.com (NASDAQ:PCLN) and InterActiveCorp (NASDAQ:IACI) seem to confirm that Americans are back in travel mode. So, I mean, once the toll bridges (the airports) are built and staffed, and the concession areas are rented out, increased tourist traffic should turbo-charge the bottom line, right?

Pretty much. This month's full-year results show just what can happen when the captive travel audience pays Grupo Aeroportuario del Sureste to land and loiter in the transportation hub at hot spots like Cancun. Commercial revenues per passenger were up 67%, overall revenues climbed 28%, and earnings jumped over 100% to $1.81 per depositary share. Operating margins were up 8% to 42%.

You get this growth for a price-to-earnings ratio of 17. And remember, it's protected by a pretty impressive moat. It's not like you and I can shake the couch for change and start our own competing facilities. Grupo Aeroportuario del Sureste is definitely worth another look. The stock may be flying high, but if it continues to deliver earnings growth -- even at a slower clip -- it should move even higher.

For related Foolishness, see:

• Don't fear the foreigners.
• No, really.

Seth Jayson needs to check his watch lists. At the time of publication, he had no positions in any firm mentioned. View his stock holdings and Fool profile here. Fool rules are here.