This has been a lousy stretch for owning Brazilian stocks,
particularly those exposed to the Brazilian consumer. If you believe
that what comes around in forex rates also eventually goes around, and
that the Brazilian consumer market is an attractive one for the longer
term, this may be a good time to consider Hypermarcas (OTCPK:HYPMY). A little like the Johnson & Johnson (JNJ)
of Brazil, Hypermarcas is a leader in over-the-counter, branded
generic, and generic pharmaceuticals, as well as consumer products like
diapers, lotions, condoms, and various beauty/cosmetic/oral care
products.
Like most Brazilian stocks, the moves in the dollar/real
exchange rate have worsened an already difficult situation, and HYPMY
shares down almost 30% over the past year (versus just under a 15%
decline for the HYPE3.SA shares). With that, I believe the shares are
priced to deliver an above-average annual return (relative to the
S&P 500) on the strength of low-to-mid teens cash flow growth.
Please read more here:
Hypermarcas Offers A Brazil Play With Double The Punch
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