While the BOVESPA (NYSEARCA:EWZ) has rallied on signs of president Dilma Rouseff re-election odds falling, Ambev (NYSE:ABEV) has sold off. However at current prices Ambev is a buying opportunity. The company produces the two leading brands of local beer: Brahma and Antarctica. They also have the rights of Latin American distribution of Anhauser Busch and Pepsi products. Rising incomes in a celebratory culture such as Brazil should be a long term catalyst for the stock. In addition, purchases from tourists will rise this quarter due to the 2014 World Cup. Also local alcohol consumption should also increase during the local team's soccer games which have been holidays in certain regions of the country. Technical momentum however, is weak which has us waiting for a favorable entry point.
Disclosure: The author has no positions in any stocks mentioned, but may initiate a long position in ABEV over the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.