Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

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.

--M.K.


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