HOLT Emerging Markets "Breakout compounders: LATAM firms forecasted for ..."

Research evidence excerpt

HOLT Emerging Markets "Breakout compounders: LATAM firms forecasted for ..."

Global Research

11 June 2026ab

HOLT Emerging Markets Equities

Emerging Markets

Breakout compounders: LATAM firms Pablo Cossaro, CFA

HOLT Sector Specialist

pablo.cossaro@ubs.comforecasted for a surge in value creation

+1-212-538 5906

Jonathan Carson

Identifying LATAM’s next generation of wealth compounders jonathan.carson@ubs.com

A number of LATAM firms may be entering a phase of accelerating value creation, as +1-212-882 5659

reflected in forecasted sequential gains in Economic Profits (EP) in 2026 and 2027.

Unlike traditional accounting metrics, the UBS HOLT EP metric captures true economic

profitability by incorporating companies' full cost of capital into the wealth generation

assessment. This note aims to identify LATAM firms forecasted for an acceleration in EP,

driven by an expansion in their forecasted CFROI and healthy asset reinvestment rates.

Screening for inflection points in corporate performance

Rather than focusing on historically steady performers, this analysis is designed to detect

inflection points as Latin American companies deliver a step change in near-term value

creation. These inflections are often led by more efficient operations, progress in

turnaround efforts, or innovation-driven growth strategies that eventually lift CFROI

trajectories. Hence, the focus is on forward-looking improvements in value creation

rather than on the historical EP performance of Latin American companies.

Leveraging HOLT valuation factors to identify opportunities

This note integrates EP growth stats with valuation signals, leveraging two HOLT factors:

1) the HOLT Scorecard Valuation factor and 2) HOLT's Valuation Relative to History factor.