Hilary Kramer is the editor of GameChangers, Breakout Stocks Under $10, and High Octane Stocks, published by InvestorPlace Media. She is also a weekly commentator on Nightly Business Report, and author of The Little Book of Big Profits from Small Stocks. She has 25 years of investing experience, first as an analyst, then as a portfolio manager, investment banker, and hedge fund manager, and has managed more than $5 billion in global private equity and publicly traded investments. She received an MBA from the Wharton School of Finance at the University of Pennsylvania and within a decade was recognized as one of the best equity investors on Wall Street.
This is a great time to buy into Brazil…and not just for its global potential, but for its rising middle class and domestic economy as well, says Hilary Kramer.
Think Brazil. We are here with Hilary Kramer, who is going to talk to us about some great opportunities in Brazil.
Brazil is a great investment destination for your equity dollars. What you want to look at, though, are the companies like Embraer (ERJ). Embraer makes the jets that have the single aisle. That is the new methodology that countries are using, because you fly into hubs.
I’ve been flying on a lot of those these days.
Really…Embraer is depending on China growth. Because in China, there has been concern about a slowdown to 7% GDP growth instead of double-digit GDP growth. It has impacted Embraer’s business—but Embraer also has a defense business, a business jet, as well as makes presidential-style planes for some of the small countries and for diplomats.
Embraer is one of the best. The technology is there, and Embraer has been very diligent in trying to use composites and materials that will create greater fuel efficiency, so look for Embraer to do well.
Another one of the Brazilian companies I love is Bank Itau (ITUB). Two of the strongest families in Brazil got together and merged. There was always Itau Bank, but now you have the scale that Itau can reach throughout Brazil.
It is an economy that is thriving. There is a continuous growth of the middle class in Brazil. And Bank Itau is no withering violet. This is an $80 billion market cap company with a very nice dividend yield.
Speaking of dividend yields, you can also get a nice dividend—really a pretty hefty one—on Vale (VALE). This is the natural resources and mineral company based in Brazil.
When China went down and there were concerns there, these natural resources companies across the board, whether it be Vale or BHP Billiton (BHP) in Australia, were really hit hard. Vale is a great company. As soon as fears of a Greek-Italian Armageddon dissipate…
Or whatever country it might be this week.
Yes, that is going to blow up, and as soon as there is return to growth mode in China, I think we are going to see Vale do very well.
Of course, the fourth company that also has an excellent dividend is Petrobras (PBR). This would be the national oil company, and has great integrity. I have been very pleased with the management. One of the greatest finds of the last 100 years.
Yeah, they had that elephant find offshore.
It was off the coast of Brazil. It is just a matter of being able to access that, which one day will happen.
And I think Petrobras is a really strong, excellent, diversified company for your portfolio, especially if you are going to have an airplane, an aircraft maker, bank, and a natural resources company as well.
That is a perfect selection.
Yeah, these four Brazilian companies will do your portfolio well.