Nicholas Kaiser
Nicholas Kaiser
Amana Growth

Pick: LAN Airlines (LFL)

The $2.2 billion Amana Growth Fund (AMAGX) has an unusual mandate: It was created to serve Muslim investors (though it's open to all). That means manager Nicholas Kaiser shuns, among others, the liquor and banking industries. It's worked, with 9.3% annual returns over the past decade, more than doubling the S&P's results. Kaiser mostly buys shares of U.S. companies for the fund but will go abroad when he perceives a golden opportunity. One of those is Chile's LAN Airlines. LAN isn't cheap -- it trades at 28 times last year's earnings -- but Kaiser thinks the company deserves its premium price because of its long-term growth potential. Analysts expect sales to rise 40% by 2014. "In Latin America you tend to have a less efficient surface transportation system," he says. "So there's quite a bit of upside for demand as people travel more." Kaiser also likes LAN's strong balance sheet, which he says will enable it to preserve its 2.1% dividend yield.


By Katie Benner, Ryan Derousseau, Amy Feldman, and Mina Kimes @FortuneMagazine - Last updated June 20 2012: 10:46 AM ET
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