This projection has less to do with the performance of the company and more to do with the declining value of the Real vs the dollar. Between last Monday and Friday the value of the Real dropped 5% and the stock dropped 8.9%. On Friday alone the Real dropped 2% and the stock dropped 3.2% setting a new annual low. As interest rates rise in the US the dollar will continue to rise. And if The Fed actually does start reducing their purchases of US debt interest rates will shoot up and ravage the value of the Real. The return on equity and dividend already announced to be paid in Dec. will surely be less than the $.627 paid in June in the absense of an extraordinary dividend. The stock is reacting to the devaluation of the Real. The next stop for this stock is $7.80, then $7.40 and so on until the Real reaches some equalibrium with the dollar. I will not be making any further purchases until I see what Jan. brings
I love the gloom doom and despair on this board; we are nearing a bottom;
best is to average as it drops 50 cents each time and collect the interest until the World Cup Soccer and
the Olympics in Brazil which should change things. This is long term investment and NOT for day traders,
There are other factors pressing on CIG & the Real as well. The growth rate of the Brazilian economy has slowed dramatically from last year to something arround 2%. Brazil has gone from a surplus trade nation to a deficit trade nation. This has caused tax receipts to decrease as spending goes on unabated. All of this is pressing on the value of the Real vs the dollar. The government is looking at companies such as CIG for more tax revenue as their "social responsibility". To that end the government has warned CIG against any further "interest on equity" dispersments to shareholders.