My first thoughts on Fidel Castro's handing off power to his brother Raúl:
Sell: Classic car part distributors, Dominican cigar companies.
Turns out I wasn't that far off.
A while back, Louis Capital Markets put out a note speculating on which stocks might get a boost if the U.S. embargo on trade with Cuba comes to an end. The firm picked Imperial Tobacco, whose Altaldis subsidiary makes cigars, hotel operator Sol Melia, and mining giant Freeport McMoran. Plus, the United States still has claim to some $7 billion worth of Cuban assets. Big holders include Starwood Hotels (HOT) and OfficeMax (OMX), which have stakes in Cuban telecom and electricity assets, though collecting isn't likely to be much easier under Raúl Castro than his brother.
Shares of the only Cuba ETF, the closed-end Herzfeld Caribbean Basin Fund, shot up 22 percent this morning on the news.