Rethinking Cuba Investing After U.N. Resolution? (CUBA)

The United Nations General Assembly “adopted a resolution calling for the lifting of the decades-old economic, commercial and financial embargo imposed by the United States against Cuba in the aftermath of the Cold War.”  If there is a single investment vehicle geared toward investing in the last off-limits nation for Americans in the Caribbean, it is Herzfeld Caribbean Basin Fund Inc. (NYSE: CUBA).

There has only been a very limited interest in the name today after the U.N. resolution.  As of yesterday, The Net Asset Value of the Herzfeld Caribbean Basin Fund, Inc. (NASDAQ: CUBA) was listed as $7.25 on the company website.  Yesterday’s closing bell price was $6.75 and today’s current share price is up 0.6% at $6.79 on close to 21,000 shares.  The 52-week trading range is $5.62 to $7.06 and the fund trades on average only about 10,000 shares a day.

As far as what the fund’s objective is for capital appreciation, it “invests in issuers that are likely… to benefit from economic, political, structural and technological developments in the countries in the Caribbean Basin, which consist of Cuba, Jamaica, Trinidad and Tobago, the Bahamas, the Dominican Republic, Barbados, Aruba, Haiti, the Netherlands Antilles, the Commonwealth of Puerto Rico, Mexico, Honduras, Guatemala, Belize, Costa Rica, Panama, Colombia and Venezuela.”  In short, this is not a pure-play for Cuba but it is the trading vehicle that usually wins when there is “‘investor-friendly” or “reopening” news or rumors about Cuba pertaining to the United States.

Normally, it would sound exciting that the Cuba Embargo even got a vote against it but the United Nations noted in its news release today that this resolution was adopted for the 19th consecutive year.  The U.S. houses the U.N., but it is not exactly a stretch to say that the U.S. does not really listen to the U.N. recommendations.

The vote was overwhelming with 187 members voting for an end to the embargo, versus only 2 against… The U.S. and Israel.  There were 3 abstentions: Federated States of Micronesia, the Marshall Islands and Palau.

Cuba is a mere 90 miles or so from Florida.  So close, yet so far away.

JON C.OGG