Health and agribusiness actions promise resilience in the face of political volatility on the stock exchange in 2022

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In the face of a year full of uncertainties, whether in the political field due to the elections or related to the performance of economic activity, one of the rare consensus among investors is that the Stock Exchange will have days of intense volatility in the coming years. 12 months.

In this challenging environment for the stock market, which still has interest rate competition back to double digits, some sectors and papers in particular should be able to present a more resilient performance compared to the average of the pairs reflected by the Ibovespa index.

In the opinion of fund managers specializing in variable income, exporters of agricultural commodities, more linked to the dynamics of the global economy, as well as businesses in the health area, are among those with the potential to deliver attractive returns, despite all the volatility.

According to Luis Felipe Amaral, founder of Equitas, stocks that are at discounted levels due to the generalized fall in the stock market over the last few months, and that are less related to the result of GDP (Gross Domestic Product), are among the main candidates for stand out in 2022.

“Some companies that are new to the stock market and are not yet well-known have fallen brutally. But, among them, there are very solid businesses behind them, which are not so closely linked to the cycle of the Brazilian economy”, affirms Amaral.

He cites as an example in the portfolio of Equitas funds, the papers of 3tentos, a company that went public at B3 in June 2021 and that operates in the field of providing services to the agribusiness sector. Since its debut, the shares have accumulated a drop of approximately 30%.

“Agribusiness is less related to the political cycle here in Brazil, at the same time it has a competitive advantage on a global scale and even benefits from a depreciation of the exchange rate, because it is an export sector”, says the Equitas manager.

Caio Lewkowicz, partner and manager at Tarpon, also sees agribusiness as one of the Stock Exchange’s most resilient alternatives to go through a year that promises strong emotions for investors.

“Although we are at a difficult time in economic terms for Brazil, if we look at the last few years, they were extremely profitable periods for the agribusiness sector.”

According to Lewkowicz, the favorable view for the segment is reflected in a relevant exposure, close to 30% of the fund’s portfolio under his management at Tarpon, in names such as Brasil Agro, Kepler Weber and Vittia.

Brasil Agro, says the manager, is a company specialized in buying and investing in large plots of land in order to make the land with a high productive capacity and then resell it, while Kepler Weber is one of the leaders in the grain storage sector.

Vittia, which made its IPO in September 2021, sells bio-defensive fertilizers that have a lower impact on the environment compared to traditional pesticide products, says Lewkowicz.

“There are three agribusiness companies in complementary activities and more dependent on the global economy.”

The health sector, with investments in the hospital chains Hapvida and Intermédica and in the pharmaceutical company Hypera Pharma, is also cited by Lewkowicz as a strategy that should not be so susceptible to the political-economic news in the coming months.

“The merger between Hapvida and Intermédica creates the largest health company in Brazil, which will seek both SUS customers who want a private plan and those who already have a plan, but want more economical options”, says the manager of Tarpon.

He adds that, in the case of Hypera, the investment is supported by the aging trend of the Brazilian population. “Regardless of whether GDP rises or falls, people will continue to consume medicines.”

Also confident in the evolution of the health business, Amaral, from Equitas, cites the shares of Rede Mater Dei and the drug manufacturer Viveo, which made their IPO in April and August 2021, respectively, among the portfolio investments that should be able to cross with relative tranquility the scenario of high volatility in the local market.

“The health sector depends less on economic activity and much more on the expected evolution of the demographics of the population in the long term. These are operations that I believe will be very resilient, even in a year of political noise”, says the Equitas manager.

Werner Roger, investment director at Trigono Capital, points out Ferbasa, São Martinho and Tupy among the papers in the portfolio that he believes should have a performance that is practically unrelated to the volatility brought about by the political dispute.

Werner explains that Ferbasa and Tupy are companies that operate in the mining and metallurgy sectors that are in very favorable moments for their operations.

That’s because the reduction in Chinese production of metallic raw materials amid plans to decarbonize the Asian giant’s economy, added to the approval of trillion-dollar plans for infrastructure in the US, forms an ideal combination for the expansion of revenue for these companies. , says the manager.

In the case of sugar and ethanol producer São Martinho, Roger points out that the growing demand for hybrid vehicles powered by new energy sources will make the company a prominent place on the global scene over the next few decades.

“There are three companies whose revenue is highly dollarized, which will benefit a lot if the dollar appreciates against the real”, says Roger. He predicts that the monetary tightening process to be conducted by the Federal Reserve (US central bank) should provoke a strengthening of the US currency on a global scale.

In any case, if we appreciate the real, it will mean that things here are going very well, which is also positive for business growth, says the director of Trigono.

Founding partner and investment director at Meraki Capital, Roberto Reis says that, given the current level of discount on the Stock Exchange, which he sees as excessive, even more cyclical securities have good potential for gains ahead.

“I think there is a very big pessimism built into the prices that is not justifiable”, says Reis.

In this sense, he cites positions recently built in shares of developers Cyrela and MRV, inserted in a sector that is highly related to the level of interest rates.

And, despite the new increases foreseen for the Selic rate, Reis states that the premiums embedded in long-term futures interest rate contracts, which are the ones that most influence real estate financing contracts, are already at very stretched levels, with room for some decompression.

The manager of Meraki Capital says that, in order to invest in construction companies, he reduced his exposure to the clothing and e-commerce segments. The advance of digital, however, is a thesis that should remain on the radar for a long time, adds Reis, who carries positions in Banco Pan and Banco Inter.

“I believe that digital banks will be the big winners in the sector in the long term. But, given the current prices, even the big banks seem at attractive levels”, says the investment director.

Given the electoral scenario, Reis also says that state-owned companies have not had space within the funds’ portfolio at this time. The favorable outlook for the continued recovery of oil prices, he says, materializes in the portfolio through a position in ExxonMobil. The American oil company’s shares are available on the Brazilian stock exchange via BDRs (Brazilian Depositary Receipts), certificates that represent a fraction of the shares originally traded in other countries.

“If oil continues to rise and reaches levels close to or even above US$ 100 (R$ 563), as we are predicting, it is difficult to imagine Petrobras readjusting prices in the same proportion. In other words, the company will not be able to capitalize on this movement , even more being an election year”, says Reis.

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