Bank sees Vale in a good moment after stimulus from the Chinese government and Porto in a clear expansion of profitability; find out more
O BTG Pactual made significant changes to its portfolio of 10 recommended stocks for October. Among them, the outputs of Banco do Brasil (BBAS3) e Prio (PRIO3) for inputs Porto Seguro (PSSA3) e Vale (VALUE3).
The bank decided to integrate Vale to the portfolio to increase exposure to China and the basic materials segment following the Chinese government's aggressive monetary and fiscal stimulus package “aimed at stabilizing a deteriorating growth environment and collapsing housing market,” the analysts wrote. .
“While we still have doubts about the long-term impact of these measures, and speculative forces are clearly contributing to the iron ore price rally, we believe the prudent approach now is to adjust portfolios.”
BTG highlights that the microeconomic environment is also more favorable for the mining company. And this is due to:
- Progress in negotiations regarding the fine for the Mariana (MG) disaster (with an agreement expected to be concluded in October);
- Beginning of the management of the new CEO, Gustavo Pimenta;
- “Decent” valuation (4x EV/EBITDA estimated for 2025) and dividend yield between 7% and 9% (depending on iron ore prices); and
- Light investor allocation.
“While operational performance remains a key concern for investors, the company has improved its iron ore production guidance for the year (the first time in years).”
To make room for Vale, BTG chose to remove Prio from portfolio of 10 shares. It is worth mentioning that, although it has left the selection, the oil company continues with a recommendation for purchase by the bank.
BBAS3 leaves, PSSA3 enters: understand the change
In the financial services sector, BTG Pactual replaced Banco do Brasil (BBAS3) by Porto (PSSA3).
The bank's analysts highlighted that Porto is entering a “new cycle of growth and profitability with ROE expansion due to improvements in the insurance mix, growth in healthcare and greater profitability in the banking/services segments.”
“Trading at 7.9x P/E for 2025 (1.8x P/PV), we reiterate our buy recommendation,” they wrote.
Like Prio, Banco do Brasil continues with a purchase recommendation for BTG. However, in BTG's view, investment in Porto appears more promising from a short-term perspective – which is one of the proposals in the monthly portfolio.
Free: check out the complete BTG Pactual portfolio
The entries and exits mentioned in this article were not the only ones promoted by BTG Pactual in the October portfolio.
And the good news is that you can check the wallet that just came out of the oven 100% freecourtesy of the largest investment bank in Latin America.
It is worth highlighting that, since October 2009, the beginning of the historical series, the portfolio has shown an increase of 430.2%, against 114.3% for Ibovespa. In other words, BTG's portfolio, called 10SIM, has a return of 376% of the main stock index in the period.
To access the complete portfolio, in addition to an analysis of the economic scenario carried out by in-house analysts, simply click here or the button below. Good investments!