See the most recommended stocks by experts to invest in in June

The shares of mining company Vale were the most suggested for those who want to invest in the Brazilian stock exchange in June. The company remains undefeated as the most recommended in 2022.

XP attributed Vale’s performance this month to expectations of easing the lockdown in China, which resumes demand for iron ore in the country.

In second place were: Petrobras, Suzano and PetroRio – with six recommendations.

For selection, the CNN Brasil Business considered the nominations of 14 banks and brokers: Órama, XP, Genial, CM Capital, Toro, Santander, Warren, Guide, Ativa, Planner, Terra, Àgora, Elite and ModalMais.

What should be on the radar:

For June, experts interviewed by the CNN Brasil Business stated that investors should have on their radar: central bank movements both in Brazil and in the United States, the war between Russia and Ukraine, China’s policies regarding Covid-19 and the Brazilian election period.

In addition, it is necessary to consider that Brazil is close to the end of the cycle of high interest rates, says Phil Soares, head of analysis at Órama, which tends to benefit the Brazilian stock market. The next meeting of the Central Bank’s Copom (Monetary Policy Committee) will be on June 14 and 15.

At the same time, in its last minutes, the US central bank (Federal Reserve) signaled interest rate hikes of 0.5 pp for future meetings. Higher interest rates in the US attract fixed income investments to the country, seen as one of the safest in the world, impacting stock markets around the world, especially emerging markets, such as Brazil.

Rodrigo Crespi, an analyst at Guide Investimentos, pointed out that the war between Russia and Ukraine pressured commodity prices, mainly agricultural and oil, given that the regions are important exporters of inputs. “In this way, investors need to be aware of any news”.

Another point that could put pressure on commodities, highlighted the expert, is China’s economic stimulus and the Covid-zero policy, which has already affected global logistics costs.

The scenario in the Asian country has caused volatility in the price of iron ore in recent weeks, which has a great impact on the Ibovespa, since 20% of its portfolio is made up of companies that work with the commodity.

And, finally, Crespi said that, despite the election being scheduled for October, it is necessary to be aware of how the market will price the electoral period and what will be the reflections on the roles of state-owned companies.

Here’s what analysts say about the most recommended stocks for May:

OK

Action: VALE3

Comment: bull

Founded in 1942, Vale is one of the main mining companies in the world and has one of the highest market values ​​among Brazilian companies. Present in approximately 30 countries, the company is one of the world’s largest producers of iron ore, pellets and nickel, in addition to producing manganese, ferroalloys, thermal and metallurgical coal, copper, cobalt, and by-products of platinum group metals, gold and silver.

The company has a robust operating structure, solid cash generation, and a multiple discount when compared to its main international peers, such as Rio Tinto and BHP.

Although volatility has been an inherent feature of international iron ore prices in recent months, we believe that the expansionary measures announced by the Chinese government, including increased state spending on infrastructure works in order to foster growth in the country, could generate a greater demand for the commodity that could sustain demand and international iron ore prices – and thus benefit Vale.

Petrobras

Action: PETR4

Comment: Guide

Petrobras is one of the largest oil and gas producers in the world. In 2020, the fields operated by the company produced 94.15% of Brazil’s oil and natural gas, according to ANP data. The company is a leader in exploration and production in deep and ultra-deep waters, with production concentrated in the Campos and Santos basins.

We expect new wells to come on stream in the medium term, contributing to increased production. And, in the short term, the continued sale of non-strategic assets; advance of the refinery divestment project; and prospect of new dividend announcements.

suzano

Action: SUZB3

Comment: Santander

Suzano is a leading company in the pulp and paper sector, being the largest global producer of eucalyptus pulp. Due to our pulp and paper price scenario for 2022, we believe that Suzano can have a large cash generation, exposure to the dollar and expansion possibilities due to its rapid deleveraging.

This strong deleveraging will make it possible to undertake new projects that will add value to the company, in addition to the possibility of increasing scale.

It is worth noting that hardwood pulp prices in China exceeded US$ 800 a ton at the end of May, according to the FOEX index, with the potential to exceed US$ 850 a ton in the coming months.

A possible impact of China’s “Covid-zero” policy remains a top investor concern, but we see pulp demand at healthy levels in all regions.

PetroRio

Action: PRIOR3

Comment: planner

We are keeping the stock in our portfolio despite the good performance in May, reiterating our positive vision for the company.

PetroRio’s focus remains on acquiring mature fields, reducing costs and increasing results, consolidating the company as one of the most efficient in the oil exploration and production segment.

On April 28, it confirmed the acquisition of a 90% interest and operation of Campo de Albacora Leste for US$ 2.2 billion.

The company recorded a net income of US$ 228.3 million in the 1st quarter, reversing the loss of US$ 7.3 million from the same period in 2021. A consistent result achieved from the expressive growth of 159% in total revenue, which reached US$ 309.7 million.

Bank of Brazil

Action: BAAS3

Comment: Land Investments

The company has been showing strong credit growth (especially in rural credit and in some segments for individuals) and good portfolio quality and is ready to present strong numbers in 2022, putting the institution at a great discount in relation to its peers, and guaranteeing an interesting return in terms of dividends for the shareholder.

The bank continues to deliver robust results, with an emphasis on profitability above the cost of capital, and we believe that the guidance in profit for 2022 should be reached, R$ 26.3 billion.