Soham Das

Gyrating Salsa: Brazilian Economy Dancing with Joy

Excellent strategy global... I always believe if one sells when everybody is selling then who is there to buy?

Volatility keeps weaklings out of the equation... if you feel bullish its best not to have weak hands in the deal :)

Gyrating Salsa: Brazilian Economy Dancing with Joy

GlobalMacro,

I am a technical analyst, and I am not following FMCG much, but yet this is my two pence:

Depending on the entry point and investment horizon which you take, my opinion will vary slightly.

If you invested in SDA anywhere between 2005-2006, then 2007 was the apt time to exit as Brazil was reeling under inflation and FMCG stocks are observed to do good at those times. In fact anytime in 2007 was a good time to exit. Now going forward, it is a strong HOLD signal from my side. You may be able to book some profits in around 12months.

And if you have planned to enter now... it is a strong BUY signal from my side. The business looks pretty good to me.

I guess if you follow granger's investment philosophy of buy and forget then this 'should' be returning quite a hefty profit.

Sadia is expected to do good in around OCT-NOV-DEC and regional wise in UK and Russia.


[Disclaimer: I do not hold SADIA SA at the time of writing and the views above should not be construed as investment advise. Please do your own deductions and refer a qualified stock broker before making any investment decisions]

Gyrating Salsa: Brazilian Economy Dancing with Joy

Hi Cachaca...

Expecting that "couple of years ago" roughly goes four years back i.e 2004, here are some of my reasons to believe things written above.
Quoting from International Energy Outlook 2007,

"Throughout Central and South America, significant shares of national electric power supplies are derived from renewable energy sources—primarily, hydropower. In times of drought, such heavy reliance on hydroelectricity has been problematic, resulting in widespread power shortages. Hydroelectric generation accounted for 83 percent of Brazil’s total electricity supply in 2004, and despite ongoing efforts to diversify the fuel mix for the country’s electricity generation, hydropower is projected to remain Brazil’s predominant source of electricity through 2030... "

In Central America it is expected to generate more than 54% of the total energy demand.

Yes, Brazil does have a problem there, but is it any worse than India's problem where it is relying on majority [circa 80%, data not checked] on the oil and natural gas imports from OPEC countries? In my opinion no! With the present oil prices spiraling, Brazil is partly insulated from this problem and thus safeguarding the national coffers.

When, a booming economy is dependent on a rising potential [renewables] rather than a falling one [read: oil] I see a chance over there for new companies to fill in this void of assuring a continuous supply. And we must not forget, Brazil is one of the most underrated economies, with an amount of emphasis given on R&D.
I see it as bricks and mortars for building a sustainable 'winning' trade.
You may very well note that, I have quoted forward data till 2030. I have a reason there.
Thats for the long term perspective. Real long! :)
Hope it clears your doubts.