While many global markets have fallen this year, the South American markets have held up relatively well.

As of May 30, Brazil's and Chile's markets had risen 22% and 5%, respectively, year to date, in dollar terms. Gerdau (NYSE:GGB) and Sadia (NYSE:SDA), in particular, have risen 72% and 47%, respectively, so far this year. But neither Gerdau's nor Sadia's surge came as a surprise to the CAPS community. Both have carried CAPS' top rating of five stars for more than six months, and our players rated these stocks to be two of the best in South America ... last August.  

Where will the next big winner come from? Here are this month's top five South American stocks right now. All of them, like Gerdau and Sadia, carry CAPS' maximum five-star rating.






Forest products

Vina Concha y Toro (NYSE:VCO)


Distillers and vintners

Empresa Nacional de Electricidad (NYSE:EOC)



Telemig Celular (NYSE:TMB)


Wireless communications

Enersis (NYSE:ENI)



Data from Motley Fool CAPS, as of May 30, 2008.

Please bear in mind that these stocks are not formal recommendations. Instead, we offer them as jumping-off points for further research. Researching five-star CAPS stocks has proved to be an effective tool for investors.

What makes them so special?
Of all of the South American-based stocks that trade on our markets, CAPS investors selected these five as the best ones right now. Let's get a feel for what our CAPS players are saying about them.

Masisa: CAPS player rabidtigerfan thinks this vertically integrated wood-products company will benefit from higher timber prices.

Timber is lagging in the commodities boom. A well managed company with high insider ownership. Global competitor, strong domestic sales in a boooming economy.

Vina Concha y Toro: In vino veritas, says Kico333, who in July observed the presence of this company's products growing around the globe.

Good wine that is being seen more and more throughout Europe, and in some expensive [restaurants]. I work in Liberia for the UN, and our PX is stocking several [varieties]. Last time I was in Brussels, I saw [company brands] Conch and Diablo in markets and restaraunts.

Empresa Nacional: Demographic trends are what support lizardnose's "outperform" rating on EOC.

POWER generation in South America, forget China look at CHILE and the other South Americian countries they provide power to. Low Yield, growth prospects are off the chart. Debt to equity just over 1. [As] the populations of South America continue to expand the need for power, will greatly increase.

Telemig Celular: Last July, CAPS all-star nestorga called Telemig "undervalued" and said to expect "excellent growth" down the road. So far, at least, that has proved to be a smart call: Telemig shares have grown 16% versus the S&P's decline of 9% since then.

Enersis: Back in November, Trainwreck1127 rationalized an "outperform" pick on Enersis: "Chile remains a well run country, and combined with exposure to other South American countries, this looks like a nice buy and hold at the right price." At present, that pick is beating the market by more than 9 percentage points.

If you'd like to see what other CAPS investors are saying about these stocks -- or any other stock for that matter, sign up for CAPS today. Registration is 100% free.