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"The Initial Price Offering

International retailer Cencosud (CNCO) began trading in the United States on Friday. The company is based in Chile, where it is the largest retailer in the South American country. With a presence in Brazil, Argentina, Colombia, and Peru, the company is also one of the largest in South America. Cencosud offered a total of 91 million shares split between stock markets in the United States and Chile. Over 15 million American Depository Shares were issued on the New York Stock Exchange, with each ADS representing three shares of common stock. Prior to the United States IPO, shares could be bought in Chile and on the pink sheets. Shares in Chile make up 7.5% of the iShares Chile ETF (ECH), where the company is the fourth-largest holding.

The Company

At the end of the company's recent fourth quarter, Cencosud owned 906 stores. The retailer is mainly an operator of supermarkets, but also has branches that include home improvement, financial services, department stores, and shopping centers."


"I’m sure by now investors are sick to death of this investing trope: the “Smaller Foreign Company-X is the Major US Company-Y of Emerging Market-Z”. Renren is the Facebook of China. Yandex is the Google of Russia. Arcos Dorados is the McDonald's of Latin America. I could go on and on. They are just phrases people say to get attention. Words that rarely ever mean anything. Renren isn’t really the Facebook of China. Yandex isn’t actually the Google of Russia. Although in the case of Arcos Dorados, it literally is the McDonald's of Latin America, so sometimes these types of descriptions are applicable.

At the risk of attracting the ire of those also tired of these types of descriptions, I present to you the Wal-Mart of Latin America … or the Safeway of Latin America. Maybe it’s the Home Depot of Latin America. The Macy’s of Latin America? Quite possible the Simon Malls of Latin America. It’s probably a little of all of those companies. Whatever you want to compare it to, I give you: Cencosud (NYSE: CNCO) the Something-or-Other of Latin America.

I can almost see some of your eyebrows rise in puzzlement. “Eh? Cencosud? Never heard of it. How do you even pronounce that?” If this is your first time hearing about the company, that wouldn’t be terribly surprising. It only started trading on the New York Stock Exchange less than two weeks ago (it previously was available only on the Chilean Santiago Stock Exchange). And it's likely that you didn’t see any of the talking-heads on CNBC mention Cencosud even once, because it didn’t go public though an incredibly overhyped IPO process. It instead came to life on the NYSE through a rather humdrum secondary offering of American Depositary Receipts (ADRs)."

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