Banco Bradesco SA (ADR) (BBD) & Three Reasons to Invest in Brazil

With the United States economy falling behind the fast pace of many other countries, now is a prime time to take a look at what’s happening abroad.

Banco Bradesco SA (ADR) (NYSE:BBD)Brazil, Russia, India and China (BRIC) are believed to have the highest potential for massive economic growth in the years ahead. In taking a closer look at Brazil, investors can see that unemployment is at a historic low. Furthermore, despite only 40% of the population connecting regularly to the Internet, Brazilians spend about $13 billion each year online. That activity could translate into more people being exposed to the stock market, while having access to online brokerage accounts to purchase stocks and drive up the prices of domestic businesses. That being said, which three publicly traded companies have the most growth potential in the years ahead?

Banco Bradesco SA (ADR) (NYSE:BBD) is well-positioned to be the go-to bank in Brazil, as the median wage increases and people start asking for loans for homes and vehicles, for example. Furthermore, with growing business opportunities in Brazil, the bank will be called upon for business loans and insurance. At the end of 2011, the company reported owning 4,634 branches, 34,516 ATMS and 12,455 shared ATMs. The company is worth nearly $36 billion.

Net Servicos de Comunicacao SA (ADR) (NASDAQ:NETC) provides television, telephone and Internet services to Latin America, and revenue is increasing as more locals have disposable income with which to buy entertainment and communications equipment. The company is valued at about $3.4 billion. Net Servicos de Comunicacao SA (ADR) (NASDAQ:NETC) is Latin America’s largest cable television provider. In 2012, the company had 5.4 million subscribers, about 4.9 million Internet users and 2.5 million phone plans. With nearly 600 million people in Latin America and the Caribbean, the company has ample room for growth. For example, in 2007, Net Servicos purchased Vivax, which was the second-largest cable company in Brazil at the time. The company also owns the Discovery Latin America Channels, including Discovery Channel, Animal Planet, Discovery Kids and Discovery Science.

BRF SA (ADR) (NYSE:BRFS) is one of the largest food providers in Brazil. Valued at over $20 billion, BRF SA (ADR) (NYSE:BRFS) is the go-to source of food for many Brazilian supermarkets. As the spending power of the general population increases, so too will its consumption. The firm is well-diversified, as it is involved in raising poultry, beef and pork. These foods were once considered higher-end products, but increased disposable income could result in people buying more of this food. The company also produces dairy products, pizza, bread, pie, vegetables, frozen lasagna, mayonnaise and margarine, to name a few.

While increasing business activity is almost enough reason to buy up the best Brazilian stocks, investors have other motivations to dedicate a portion of their portfolio to Brazil. In 2014, Brazil is hosting the World Cup, and in 2016, the nation will host the Summer Olympics. Not only will these events generate a considerable amount of revenue for Brazil, they will also bring global attention to this nation. If you invest in Brazil before these events, you could be getting in just in time to see the profits soar after everyone else catches on to this buying opportunity.

The article 3 Reasons to Invest in Brazil originally appeared on and is written by Phillip Woolgar.

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