Brazilian conglomerate Cosan (
NYSE:CSAN)
is a complicated story in the best of times, as this company pursues a
holding company structure to invest in a wide range of businesses,
including its Raizen joint venture with Shell (
SHEL)
in sugar, ethanol, and retail fueling, its Rumo rail operations, and
other businesses like natural gas distribution, lubricants, and land
development. On top of this “chosen” complexity, the company is now also
dealing with a more volatile environment for its core sugar, ethanol,
and energy (or SEE) operations, with weaker ethanol prices in Brazil and
more risk in the sugar market. Cosan
is a difficult stock to recommend in some respects, as there are a lot
of moving parts to track and this isn’t the easiest investment for
investors to assess. I do believe management has built a track record
of value creation, but it looks as though the business will only get
more complex and diversified over time. I do believe this pullback in
the shares is an opportunity for investors who can look past increased
near-term volatility, but this isn’t really a “sleep well at night” sort
of stock.
Click the link for the full article:
Cosan: Volatility In SEE Markets Only Adds To The Complexity
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