For Immediate Release
Chicago, IL – August 23, 2016 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Companhia de Saneamento Basico do Estado de Sao Paulo (SBS), Companhia Energética de Minas Gerais S.A. (CIG), Ultrapar Participações S.A. ( UGP) and Fibria Celulose S.A. (FBR).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Monday’s Analyst Blog:
4 Brazil Stocks to Buy on an Improving Economy
Till recently, the only bright spot for Brazil seems to be the successful conclusion of the Rio Olympic Games. A tough win in the national favorite, football and an unprecedented victory in the pole vault contest gladdened the heart of international spectators and citizens alike. The country’s economy may not be in a position to perform similar feats, but things have improved considerably in recent times.
Signs are already evident that the economy is getting its act together. Several economic indicators are improving even as prospects for select emerging markets, such as Brazil, improve. At this point, picking stocks from Brazil may make for a smart investment choice and involve a lower degree of risk than before.
Economy Turns Over New Leaf
To be fair, doubts over the state of Brazil’s economy have not disappeared completely. However, some key economic indicators have improved, giving rise to optimism about the state of things. For instance, manufacturing investment has witnessed a pickup. In June, capital goods imports increased 18% in dollar terms on a yearly basis. This is the first year-over-year increase recorded since Sep 2014.
Additionally, industrial production increased in June, marking the fourth consecutive monthly increase following two back to back years of near continual declines. Inventories of unsold goods are falling and the decline of trucks on motorways has ceased.
Political Crisis Nears Resolution
Equally important for the country is its perception as far as global investors are concerned, especially when it comes to issues like corruption in high places. While funds continue to flow in due to several global factors, the office of the country’s president has been mired in controversy for some time now. However, things are set to change now as impeachment proceedings are due to begin against former president Dilma Rousseff on Aug 25.
Even more crucial has been the diametrically different approach of her successor, acting president Michel Temer, especially when it comes to economic issues. Equity markets have experienced resurgence ever since Temer took charge in May. Perceived as being more industry friendly, his pragmatic approach in dealing with the country’s congress has been refreshing. Additionally, he has held out the promise of several economic reforms, which are likely to boost market confidence.
IMF, Moody’s Revise Views on Economy
Meanwhile, the world at large is changing its views on Brazil’s hitherto embattled economy. After lowering its growth projections for Brazil on several occasions, the IMF has recently revised its GDP estimate for 2017 upward. The IMF now thinks that Brazil’s economy will grow by 0.5% next year. This is significant, since the agency had estimated in April that no economic expansion would take place.
Additionally, Moody’s revised its outlook for the biggest emerging economies last week. The ratings agency now expects that select emerging markets will grow at a faster clip this year and in 2017. While growth has been revised downward for Turkey and South Africa; Russia, China and Brazil are expected to grow at a faster pace.
Brazil’s domestic economic indicators are showing significant improvement even as global perceptions about the country are improving. Its willingness to resolve corruption issues is adding to the growing positive sentiment about the economy.
This is why you would not go wrong by investing in select stocks from Brazil. However, picking winning stocks may prove to be difficult.
This is where our VGM score comes in. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three scores. Such a score allows you to eliminate the negative aspects of stocks and select winners. However, it is important to keep in mind that each Style Score will carry a different weight while arriving at a VGM score.
We have narrowed down our search to the following stocks based on a good Zacks Rank and VGM score.
Companhia de Saneamento Basico do Estado de Sao Paulo (SBS) or SABESP, provides public water and sewage services in the state of Sao Paulo, Brazil, which includes Sao Paulo, one of the largest cities in the world.
SABESP has a Zacks Rank #2 (Buy) and a VGM Score of A. The company has expected earnings growth of more than 100% for the current year. The forward price-to-earnings (P/E) ratio for the current financial year (F1) is 11.46, lower than the industry average of 23.20. Its earnings estimate for the current year improved by 12% over the last 30 days.
Companhia Energética de Minas Gerais S.A. (CIG) or Cemig, is engaged in the generation, transmission, distribution and commercialization of electric power.
Companhia Energética de Minas Gerais has a Zacks Rank #2 and a VGM Score of A. It has a P/E (F1) of 11.12, which is lower than the industry average of 18.27. Its earnings estimate for the current year improved by 8.3% over the last 30 days.
Ultrapar Participações S.A. (UGP) or Ultrapar, is one of the largest distributors of liquefied petroleum gas in Brazil and a leading producer of petrochemicals and chemical.
Ultrapar Participações has a Zacks Rank #2 and a VGM Score of A. Its earnings estimate for the current year improved by 5.4% over the last 30 days.
Fibria Celulose S.A. (FBR) or Fibria, is a paper product company which produces bleached eucalyptus pulp exclusively from renewable plantation.
Fibria Celulose has a Zacks Rank #2 and a VGM Score of B. The company has expected earnings growth of more than 100% for the current year. It has a P/E (F1) of 4.95, which is lower than the industry average of 13.57. Its earnings estimate for the current year improved by 25% over the last 30 days.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
Follow us on Twitter: https://twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
SABESP -ADR (SBS): Free Stock Analysis Report
CEMIG SA -ADR (CIG): Free Stock Analysis Report
ULTRAPAR PA-ADR (UGP): Free Stock Analysis Report
FIBRIA CELULOSE (FBR): Free Stock Analysis Report
To read this article on Zacks.com click here.