CHICAGO, Feb. 18, 2011 /PRNewswire/ -- Today, Zacks Investment Ideas feature highlights Features: Gafisa SA (NYSE: GFA), CPFL Energia (NYSE: CPL), Petroleo Brasileiro (NYSE: PBR), AMBEV (NYSE: ABV) and Ultrapar Holdings, Inc. (NYSE: UGP).
Top Brazilian Stocks
Mention Brazilian stocks, and most people think about high fliers trading at multi-year highs with nose-bleed valuations. But in spite of Brazil's growing economic profile, its leading equity index, the Bovespa, is actually trading in the red for the year.
Brazil Looking Strong
Although it would be easy to assign that downward pressure to slowing growth, its actually just the opposite. Brazil is growing so quickly that signs of inflation have begun to pop up in its economy, which has forced the country's Central Bank to tap the brakes and raise interest rates.
No doubt that will present many unique challenges as Brazil continues to learn how to manage its growth. But in the short run, it offers an opportunity to buy a number of very strong names in the category that are trading well of their high or with a very attractive valuation. Let's go ahead and take a look at some of our favorite Brazilian stocks.
Top 8 Brazilian Stocks
Gafisa SA (NYSE: GFA) is a Brazilian home builder with a market cap of $2.73 billion. This Zacks #3 rank stock is trading well off its all-time high from November and offers a highly discounted forward P/E of just 8X.
CPFL Energia (NYSE: CPL) is an electric utility with a market cap of $12 billion. This Zacks #3 rank stock is trading near a recent high, but the valuation picture is well in check with a forward P/E of 13.5X, in line with the industry average. It also offers a fat 7.7% dividend yield.
Petroleo Brasileiro (NYSE: PBR) is one of the world's largest energy companies with a market cap of $242 billion. Struggling with some funding issues over the last year, this Zacks #3 rank's $37 share price is well below its all-time high above $75. The valuation picture is in check too, with a forward P/E of 11.5X.
AMBEV (NYSE: ABV) sells regular and alcoholic beverages with a market cap of $84 billion. I'm not sure this is a huge value play, but this Zacks #3 rank stock just split its share price 5-for-1, so at the very least this is an opportunity for some of the smaller accounts of the world to grab a reasonable allocation to a company with a strong consumer presence in a leading emerging market.
Ultrapar Holdings, Inc. (NYSE: UGP) distributes liquefied petroleum gas and lubricants and has a market cap of $8.2 billion. This Zacks #2 rank stock recently pulled back from its high and offers great value, trading with a forward P/E of 15.5X, a nice discount to its peer average of 18.5X.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Len Zacks. The company continually processes stock reports issued by 3,000 analysts from 150 brokerage firms. It monitors more than 200,000 earnings estimates, looking for changes.
Then when changes are discovered, they're applied to help assign more than 4,400 stocks into five Zacks Rank categories: #1 Strong Buy, #2 Buy, #3 Hold, #4 Sell, and #5 Strong Sell. This proprietary stock picking system; the Zacks Rank, continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter Profit from the Pros. In short, it's your steady flow of profitable ideas GUARANTEED to be worth your time. Get your free subscription to Profit from the Pros at: http://at.zacks.com/?id=7298
Follow us on Twitter: http://twitter.com/ZacksResearch
Join us on Facebook: http://www.facebook.com/home.php#pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
SOURCE Zacks Investment Research, Inc.