The composition of the recommended stock portfolio for November CNN Brasil Business counted on the nominations of some of the main banks and investment brokers in Brazil. They are: Banco do Brasil, Órama, Guide, Santander, Warren, Ativa, Terra, Modalmais, CM Capital, Inter and Guide.
THE OK followed once again as the most recommended action, with eight suggestions in total. The asset of mining company VALE3 was followed by ITUB4, from Itaú Unibanco, which had seven recommendations, and by B3 (B3SA3) and Totvs (TOTS3), both with four nominations.
We had some changes in relation to the October portfolio, with PetroRio (PRIO3) replacing Petrobras’ preferred share, PETR4. The shares of Totvs, B3, Wege, Rumo and Lojas Renner also gained space in the November portfolio, after being left out of the consolidated for the previous month by the difference of one indication.
Highlights for the month
Here’s what analysts said about the best stocks for November:
OK
Action: VALE3
Comment: drama
“Vale is the world’s largest producer of iron ore, with sales of over 300 million tons a year. The high quality of the ore, combined with the economies of scale gained from the large volume produced, make Vale’s production internationally competitive.
The price of ore has declined, but is still above the historical average of US$75 per ton. The expectation is to maintain this current level, which ensures a still very good price for Vale, ample cash generation and ability to pay dividends.
Its robust semi-annual dividend payout is a great attraction and a way to balance our investment portfolio with a very solid company.”
Itaú Unibanco
Action: ITUB4
Comment: BTG Pactual
“It remains our ‘Top Pick’ among Brazilian banks, showing strong commercial growth in the last 18 months, driven by a cultural transformation. The wholesale business performed very well in the 1st half of 2022, with high profitability (28% ROE) and cost-to-income below 25%.
In 2023, we saw Itaú’s net income grow 15% year-on-year, after growing around 20% in 2022 (our estimate). In our recent meetings, they said they are laying the groundwork for superior performance in the next 5 to 10 years. The bank’s constant ‘mode of attack’ and stronger growth appetite may justify trading the bank at a higher multiple than its historical average.
In addition, a tighter capital landscape would force fintechs to focus on profitability (just like Itaú), which also helps level the playing field for the incumbent, which has long been seen as Brazil’s premium bank. We reiterate ITUB4 as a buy recommendation and one of our Top Picks.”
Totvs
Action: TOTS3
Comment: XP
“Totvs outperformed the Ibovespa in October, which can be explained by: business resilience in the technology sector; and market optimism regarding the results of the 3rd quarter of 2022.
Our investment thesis is based on expanding the core business with cross-selling and upselling (higher added value); entry into new markets (mainly in the Business Performance and Techfin segments [tecnologia voltada para serviços financeiros]); and re-rating, as we see attractive risk-return at current multiples compared to international peers and new segments (Business Performance and Techfin).”
B3
Action: B3SA3
Comment: Bank of Brazil
“We understand that the last few quarters have been quite challenging for B3, especially in the listed segment, which was impacted by the sharp rise in interest rates in Brazil. However, the company proved that it has the resilience and timeliness to go through times of adversity by advancing in alternative lines of business – such as the Over-the-Counter and Technology, Data and Services segments – and generating revenues that offset part of the impact felt in the listed segment. , also demonstrating the strength of its diversification.
Our investment thesis is based on the interpretation that the worst moment in the domestic scenario is over and that B3 should emerge stronger for 2023, mainly driven by the increase in volumes traded on the stock exchange as uncertainties decrease and appetite for risk increases on the part of investors.
In addition, we also assess that Brazil is better positioned economically in the global context compared to other emerging countries, making it more attractive for the flow of foreign capital in the relative analysis.”
Source: CNN Brasil
Joe Jameson, a technology journalist with over 2 years of experience, writes for top online news websites. Specializing in the field of technology, Joe provides insights into the latest advancements in the industry. Currently, he contributes to covering the world stock market.
