Mobius Proves Prescient by Avoiding Sanborns IPO

A year after Mark Mobius labeled Mexican billionaire Carlos Slim’s latest initial public offering too expensive, investors have come to the same conclusion.

Slim’s Grupo Sanborns SAB, a chain of retail stores and restaurants, has declined 13 percent since its 11.35 billion-peso ($854 million) share sale in February 2013, underperforming Mexico’s benchmark IPC index, which fell 12 percent in the period. Mobius, executive chairman of Templeton Emerging Markets Group, said a few weeks after the IPO that the deal was “overpriced.” Sanborns debuted in Mexico with a price-to-earnings ratio of 22.5 times, exceeding the average of 19.1 times for the 35 companies in the IPC.