Sunday, December 21, 2008

Time for Brazil Stocks?

The iShares MSCI Brazil Index (EWZ) is down about 55% for the year, however, in the last month, it has risen over 35%. Brazil companies are on the move. Of the four BRIC countries, Brazil seems to be the country that is in the strongest shape and has the greatest potential. So what Brazilian stocks should you invest in? One resource is the book Investing in Stocks.

If you are looking for a petrochemical company, there is Braskem S.A. (BAK), the largest thermoplastics producer in Brazil. Unfortunately, the company has recently generated negative earnings; however, revenues for the latest quarter were up by 8.9%.

With growth in the rebuilding of infrastructure, the demand for steel should increase, and should benefit Companhia Siderurgica Nacional (SID), the second largest Brazilian steel manufacturer. The stock has a PE of 15.5, and a yield, based on historical payments this year, of 13%.

Companhia Vale (RIO) is the second largest mining company in the world and the largest logistics operator in Brazil. The stock has a PE of 7 and a yield of 1.1%.

Banco Itau Holding Financeira S.A. (ITU) is the second largest bank in Brazil, and also owns the investment company, Investimentos Itau. The stock has a PE of 15.5 and a PEG of 0.84. It pays a small yield of 0.5%.

Telemig Celular Participacoes S.A. (TMB) is one of the largest cellular providers in Brazil. The stock has a PE of 5 and pays a small yield of 0.%.

If you like beer, you'll love Companhia de Bebidas Das Americas (ABV) also known as AMBEV, which distributes beer, soft drinks sport drinks, and bottled water. The stock has a PE of 19 and a PEG of 2.5. Their yield is 5.1%.

CPFL Energia S.A. (CPL) is one of the largest electrical utilities in Brazil with a PE of 12 and a PEG of 8.13. The yield is 13.1% based on historical dividend payments.

To see a list of all Brazilian stocks, check out or the book Investing in Stocks.

Author does not own any of the above. However, he wrote the above book.


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