For the most part, investors can't seem to get enough of Brazilian
consumer stocks, bidding many of them up to exceptionally demanding
valuations. And to be fair, many of these companies are producing pretty
solid growth numbers. In the case of Arcos Dorados (ARCO),
though, a combination of sluggish comp-store growth, rampant cost
inflation, and fears of competition seem to be combining to create a
stock that many investors are pretty ambivalent about today. While it is
important that investors not understate the risks to the Arcos business
model, I think these shares could be an interesting speculative play at
these levels.
Continue reading:
Arcos Dorados Somewhere Between Gold And Scrap Iron
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