Stock market investments have been punished since the beginning of the year. The Ibovespa fell by 11.5% in June and by almost 6% in the first half of the Ibovespa. This devaluation, however, opens space for opportunities. Almost all of the 65 shares on the Ibovespa are being traded at a discount. In this xepa, what’s worth buying? What can recover first?
The biggest drops are in the consumer, retail and services sectors. Some companies, such as anti-fraud technology Clearsale (CLSA3), have dropped dramatically in value. In July last year, after its IPO, the company was worth R$ 1.3 billion. Now, it’s costing almost half: R$700. The share price dropped from R$28.50 to R$3.85.
Last week, at an event in São Paulo, billionaire Luís Stuhlberger, owner of the Verde Asset Management fund, which has Credit Suisse as a shareholder, said he is taking advantage of the low price season and buying shares on the São Paulo Stock Exchange. . “If Stuhlberger is buying, it’s because it’s worth it,” said Phil Soares, an analyst at Órama Investimentos.
Why have stocks dropped so much?
Basically because interest rates have gone up. “The Stock Exchange has an inversely proportional relationship with interest”, says Gustavo Pazos, an analyst at Warren. But the consumer, retail and service sectors are most affected because their activities are hardest hit by rising prices and the higher cost of money.
The exceptions are oil and gas companies. “As long as the war and the boycott of oil in Russia last, we will live in a scenario of lower demand and higher prices”, explains Pazos. Therefore, these companies remain valued.
And what’s worth buying?
That depends: you can choose between the stocks that should recover first or the ones that can rise the most, when this cycle of interest and high inflation passes. That’s because the recovery will be gradual.
“No one knows when all this will pass. Unlike other times, we are experiencing a cycle of inflation that we joke that it is imported, the whole world is suffering from high prices, due to the pandemic, the war in Ukraine, the high of oil”, says Pazos.
But at some point this must be overcome. The president of the Central Bank of Brazil, Roberto Campos Neto, recently stated that the worst moment of inflation in Brazil is over and that Brazil is very close to finishing all the work of raising interest rates to tame the rise in prices.
In this first moment of the recovery, according to Phil Soares, from Órama, the companies that are now suffering less will react: those in the electricity sector, those of basic products (commodities), the banks. “All these companies that have more stable results have fallen less in price than the others and will be the first to recover. But it won’t be a big gain”, he explains.
So, if you want faster results, bet on them. But knowing that the upside potential is not so great.
Unhurried
Those who are not in a hurry and can wait longer should look for companies whose shares are down, but which are good companies, with lean management. They are down for macroeconomic reasons, not problems at home.
It is chance, for example, according to Soares, the food industry M.Dias Branco (MDIA3) and the beverage manufacturer Ambev (ABEV3). “The biggest, most well-established companies will come back before those that are still growing”, says the analyst at Órama.
Others that promise a good gain are those focused on the consumption of classes A and B, which are less susceptible to the effects of inflation.
fat gains
Now, if you want strong valuations, the way is to bet on who has fallen the most: the consumer, retail and services sector. “They’ve lost a lot and they have a lot of ground to recover,” says Pazos. Soares believes they could generate fat gains when interest rates fall and inflation cools down. But until then, they will continue to lose value.
After retail, consumer and service companies, the last to recover will be the real estate sector, which is much more dependent on the interest rate. After them, the technology companies and only later the indebted companies. “The problem is that this is not going to happen anytime soon. For all this to change direction, in addition to GDP growth, the population needs to have a real salary increase”, says Pazos.
And next semester?
For the next few months, the scenario is not the best. The global resection should continue to affect the economies of the countries and the Brazilian one is not left out, according to him. The price of commodities (agricultural products, ores) may have lower demand and prices should fall, as well as stocks.
A good bet, in this case, is bank assets. Even if they don’t earn much, says Pazos, they pay good dividends.
