Tag Archives: Brazil

Market opportunities by T-Advisor: Sabesp

T-Advisor, through its tool Market Opportunities, has detected the company Sabesp, listed in Sao Paulo Stock Exchange, as an opportunity for investment.

These are the main figures about performances and volatility in the last years:

Sabesp main figures in T-Advisor

Sabesp trend in T-Advisor

The chart shows the evolution in the last year:

Sabesp chart in T-Advisor

The technical analysis reveals also more data:

Sabesp technical analysis in T-Advisor

Finally, the risk analysis is as it follows:

Sabesp risk analysis in T-Advisor

Sabesp is the largest waste management company in the world by market capitalisation. It is a mixed capital company that provides water and sewage services to the State of Sao Paulo in Brazil. Founded in 1973, it is listed in NYSE and Bovespa since 2002, although the majority of the capital is owned by the State of Sao Paulo Government.

Net operating income in the first nine months of 2015 was 8,488.5 million reales, a 1.42% more than in the same period of 2014. Ebitda (Earnings before interests, depreciation and amortization) improved in that period a 24.6% compared with 2014, till 3,017.1 milliones reales. However, net profit got down a 91.3%, till 75.3 million reales, due to a loss in the third quarter. The share price has risen a 60% since the minimum in January 2015.

Market opportunities by T-Advisor: Bradesco

T-Advisor, through its tool Market Opportunities, has detected the company Bradesco, listed in Sao Paulo Stock Exchange, as an opportunity for investment.

These are the main figures about performances and volatility in the last years:

Bradesco main figures in T-Advisor

The chart shows the evolution in the last year:

Bradesco chart in T-Advisor

The technical analysis reveals also more data:

Bradesco technical analysis in T-Advisor

Finally, the risk analysis is as follows:

Bradesco risk analysis in T-Advisor

Bradesco is the second largest bank in Brazil. It has grown since the beginning of the century with several purchases and mergers. The group offers all kind of financial products, even insurances, and have branches in all municipalities in Brazil. The bank has around 17 million customers.

Bank financial margin has increased 45% in the last five years, till R$ 43.2 bn, although this figure stagnated between 2012 and 2013. Adjusted net income has grown 61% in the last five years, till R$ 12.2 bn, with an important increase between 2012 and 2013 (+5.9%). The share registered a minimun in February 2014, but since then the price grew and now it is 41% higher.

Market opportunities by T-Advisor: Brasil Foods

T-Advisor, through its tool Market Opportunities, has detected the company Brasil Foods, listed in Sao Paulo, as an opportunity for investment.

These are the main figures about performances and volatility in the last years:

Brasil Foods main figures in T-Advisor

The technical analysis reveals also more data:

Brasil Foods technical analysis in T-Advisor

The chart shows the evolution i the last year:

Brasil Foods chart in T-Advisor

Finally, the risk analysis is as follows:

Brasil Foods risk analysis in T-Advisor

Brasil Foods (BRF) is one of the biggest world players in the food sector. The company was created as a result of the merger between two Brazilian companies in 2009. Since this year, BRF has enlarged its size with several acquisitions in Argentina, Middle East and China. It has more than 100.000 employees in 50 factories and exports its productions to 110 countries.

Net sales in 2013 reached R$ 30,521 million, a 7% more compared with the former year. Net income jumped notoriously till R$ 1,062 million, a 38% more. Since the merger, the company multiplied 5 times the net income. The market value also doubled in the same period.

Brazil: emerging opportunities

Brazil, the Latin-American biggest country, the member of the BRICS group (with Russia, India, China and South Africa) and one the main emerging countries deals with two challenges: a bigger recession than expected and a presidential election in October with a possible change. President Rousseff and candidate Silva are running neck-and-neck in the polls.

Markets worked with three scenarios after the election: Rousseff reelection, the least preferred, and a victory by the centre-right or the ecosocialist Silva. Now, as centre-right is almost out of the competition in the polls, uncertainty increases amongst investors.

As an emerging country, Brazil has still many opportunities to develop. There is still a lack in public services and infrastructures, but social standard of living improved in the last years. What about foreign investments? As the chart shows, it was a very interesting country for money:

Foreign investment in Brazil since 1995

What about the stock exchange? Main winners in Bovespa, Sao Paulo stock exchange main index, are currently a company focused on education (Estacio Participaçoes), financial companies (Cielo, Banco do Brasil  and CETIP) and a food producer (JBS). These are the results shown in T-Advisor:

Best performers in Bovespa

On the other side, the worst performers are industrials (Gerdau Metalurgica and MMX Mineraçao), real estate and building companies (Rossi Residencial and PDG Realty) and the telecom Oi. These are the figures in T-Advisor:

Worst performers in Bovespa

T-Advisor system has also found a short-term market opportunity: Tractebel Energia, with the following main figures:

Tractebel Energia main figures

As it is easy to see, Brazil is a complex country. Although industry and mining resource branches are one of the strongest in the world, opportunities for investors are more linked to services, as the population improves progressively its standard of living.

Emerging markets: risk with chances in 2014

Emerging markets Puzzle with Brazil, Russia, India and China flags by T-Advisor

Emerging markets compound an increasing number of countries in the last years. In the beginning, Goldman Sachs pointed them as BRIC (initials of Brazil, Russia, India and China). This successful combination enlarged joining to this group another countries: Indonesia, Korea, Taiwan, South Africa and Turkey. In the markets, they are divided between the “fragile five” (Brazil, India, Indonesia, South Africa and Turkey) and the “fab four” (China, Taiwan, Korea and Russia). The reason to build this both groups is linked to the current account position: deficit for the first ones, surplus for the second ones.

This point is quite important in the current financial situation and conditions investors’ decisions. The “fragile five” will suffer from the tapering begun by the Fed in December. The costs to finance their deficits will increase as the dollar will be more expensive and the US debt will require higher yields. Moreover, these countries will deal with elections in 2014. On the contrary, the tapering decision did not affect the fab four, which represent 50% of the MSCI Emerging Markets index.

What is the best in emerging markets? Just run away? Take the money and say goodbye? Schroders disagree with a pessimistic position about them. As this bank underlines, these countries have solid economic fundamentals and attractive valuations. However, tapering will create uncertainty in some countries, as it was mentioned above. Avoid an exposure to tapering-affected countries and overweight the other group is the point for the British bank.

Russia appears as a specially cheap country for investors, as Alken Asset Management recently stated. The situation is similar in India: low prices open great chances, but it depends on the election results, the economic expansion and the effect of the Fed tapering. In the case of China, the view is driven to sectors that did not outperform in 2013. Possibly, Brazil will suffer at most, as the widening current account deficit will affect the economic outlook, despite the positive impact of the Football World Cup in investment.

Invest in emerging markets is a risky game, but with productive incomes and profits if the right keys are played. In this case, macroeconomics will have a very important role in investors’ decisions.