Here's Why Grupo Aeroportuario del Pacifico's Stock Hit Some Extreme Turbulence Today
Image source: Getty Images.
What happened
Shares of Mexican airport operator Grupo Aeroportuario del Pacifico (NYSE: PAC) descended today and were down more than 10% by 3:30 p.m. EST. The likely driver of today's sell-off is the election of Donald Trump as the president of the U.S. In fact, since his election, PAC and fellow Mexican airport companies Grupo Aeroportuario del Sureste (NYSE: ASR) and Grupo Aeroportuario del Centro Norte (NASDAQ: OMAB) are all off sharply:
So what
The reason Mexican airport stocks are selling off is that Donald Trump ran on an America-first policy platform, which could have a direct impact on U.S.-Mexico relations. Aside from his desire that the U.S. build a wall across the southern border with Mexico, his official policy platform on NAFTA is as follows:
One of the potential ramifications of this stance is less air travel between the U.S. and Mexico, which would impact traffic at Mexico's airports. On top of that, domestic travel within Mexico could slow down if travelers begin to worry that their jobs are no longer safe should the U.S. pull out of NAFTA, or if companies move jobs back to the U.S. Further, increased volatility between the dollar and peso could impact dollar-denominated earnings for Mexican airport companies.
Now what
The market hates uncertainty, and right now there is a tremendous amount of it surrounding the future relationship between the U.S. and Mexico. That uncertainty alone could curb passenger traffic at Mexican airport companies over the next several months, until there's some clarification on how the two nations will get along in the future. This clouded future could lead to a turbulent ride over the next few months for investors in Grupo Aeroportuario del Pacifico.
10 stocks we like better than Grupo Aeroportuario del Pacifico When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Grupo Aeroportuario del Pacifico wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of November 7, 2016
Matt DiLallo has no position in any stocks mentioned. The Motley Fool recommends Grupo Aeroportuario del Pacifico and Grupo Aeroportuario del Sureste. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.