Just a couple of days ago, Standard & Poor revised Brazil’s economic outlook from “Stable” to “Poor.” Brazilian stocks and currency are down by 7% and Brazil’s growth has been stagnant, growing by just 0.6% in the first quarter. However, the Brazilian consumer price index is at a 6.5% ceiling, which meets expectations.
Brazil’s disappointing economy is an opportunity for international investors
The Brazilian government has stated that its focus is to fight inflation, not lackluster growth. For international investors, this presents a unique opportunity. Since Brazil one of the economic giants that will grow stronger in the years to come, its publicly listed companies on NYSE and other important exchanges of the world will offer investors with lucrative returns and investment opportunities.
Brazilian stocks are affordable yet hold great promise for the future. With this in mind, I shall discuss three little-known yet lucrative Brazilian companies listed on the New York Stock Exchange. These three companies are rarely discussed, unlike Petrobras, Vale, or Embraer, all of which are great investment options too.
Cosan Limited (USA) (NYSE:CZZ), a valuable but affordable Brazilian stock
Cosan Limited (USA) (NYSE:CZZ) is a Brazilian conglomerate producer of energy, sugar and bioethanol. In 2008, it purchased lucrative downstream fuel distribution plants from Esso. The company is one of the largest producers of alcohol and sugar in the world and has a processing capacity of 56 million tons of sugar cane per annum. In 2010, it signed a deal with Royal Dutch Shell to distribute and market not only fuels but also operate sugar and ethanol businesses.
Cosan Limited (USA) (NYSE:CZZ) trades at $18 and has a market cap of almost $5 billion. With an enterprise value of $9.3 billion, it is certainly one of the best Brazilian stocks to invest in. What’s more, it has a price-to-sales ratio of 0.33, which is way beyond what is expected to make a good investment choice. Although Cosan Limited (USA) (NYSE:CZZ) posted disappointing 4Q13 earnings, it holds a ‘buy’ rating at Zacks. With a promising future ahead, this stock will prove to be expensive to purchase in the future. At $18, it is one of the more affordable stocks to purchase today.
Exploit Brazil’s increasing smartphone usage
Telefonica Brasil SA (ADR) (NYSE:VIV), which was earlier known as Telefonica Brasil SA (ADR) (NYSE:VIV), is another great stock to purchase. It is the largest telecommunications company in Brazil and has an active user base of 76 million people. The company was formed when Portuguese Telecom and Spain’s Telefonica Brasil SA (ADR) (NYSE:VIV) sign a joint-venture and merged several Brazilian mobile phone operations. The company operates CDMA, GSM and 3G networks in Brazil.