Top Investors are Wary of These Rising Brazilian Stocks

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The gains realized by Brazil’s real, on the other hand, is driving Banco Bradesco SA (ADR) (NYSE:BBD) shares in afternoon trading, pushing the stock up 4.6%. According to Bloomberg, the Brazilian real went up 0.8% to 3.9018 per dollar at 12:34 p.m. in Sao Paulo on the back of speculation that the U.S. Federal Reserve will not raise interest rates in 2015, because of weak employment data for September. Brazil, nonetheless, is facing an economic recession, aggravated by attempts by lawmakers at overthrowing President Dilma Rousseff. As a result, the real is over 30% in the red year-to-date. ABN Amro Bank NV strategist Georgette Boele tells Bloomberg that the delay in the Fed raising interest rates benefit emerging-market currencies as the real, but Brazil’s tumultuous political climate, high inflation and weak fundamentals are working against the country’s currency.

Follow Banco Bradesco S A (NYSE:BBD)

This may be exactly why the general sentiment from the investors Insider Monkey tracks was not good for Banco Bradesco SA (ADR) (NYSE:BBD) in the April-to-June quarter. Hedge funds owned a mere 0.50% of the firm’s outstanding stock at the end of June. Sentiment may be rising for the company, however, as the value of the hedge funds’ investments grew by over 19% to $210.64 million at the end of June, even though the stock lost 1.29% at the time. There were 15 hedge funds in our database with long Banco Bradesco positions on June 30, up by two from March 31. Among the investors we track, Cliff Asness’ AQR Capital Management owned the largest stake in the Brazilian bank, ending the second quarter with 12.19 million shares, up 7% quarter-over-quarter.

Disclosure: None

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