Recommended portfolio turnarounds: ARZZ3, ELET3, PETR4 and TOTS3 among February preferred stocks

Driven by a more positive international context, Ibovespa closed January on a positive note, up 3.4% to 113,430 points. At the turn of the month, analysts promoted several changes in recommended stock portfolios – with an eye on some indicators that could affect asset prices, including the Selic, to be defined this Wednesday (1st), at the first monetary policy meeting Committee (Copom) in 2023 and under a new government.

However, the entry and exit of shares in the portfolios did not affect the top two positions in the overall ranking, which are still held by (VALE3) and Itaú Unibanco (ITUB4), with nine and seven nominations respectively for February.

Since then, four companies have been among the most cited: Arezzo (ARZZ3), Eletrobras (ELET3), Petrobras (PETR4) and Totvs (TOTS3), all with four members.

The list of specialists’ favorites is completed by Assaí (ASAI3) and Prio (PRIO3), both with five recommendations. These two have remained among the most remembered in relation to January, following suit at the top of the poll.

With the review of the portfolios, B3 (B3SA3), BB Seguridade (BBSE3), Hypera (HYPE3), Multiplan (MULT3) and Weg (WEGE3) this month leave the ranking of the most suitable, according to the periodic monitoring carried out by the Money info.

Regarding the market backdrop, BB Investimentos believes that the external backdrop will continue to foster a more risk-averse environment for emerging countries in the coming months, a backdrop that can be captured by the local stock exchange.

“Due to the risk premium adjustment movement in the domestic market in recent weeks, our assessment suggests that the ratings they already incorporate higher discount rates, making the risk-reward ratio more favourable,” the institute says.

Every month, the Money info analyzes portfolios recommended by ten brokerage firms, highlighting the five companies most cited by analysts. The number of shares highlighted in the survey could be higher, in the event of a tie – as is the case now.

Check below the eight most recommended stocks for February, the number of recommendations and the performance of each stock in January, in 2022 and over 12 months:

Sources: Agora, Ativa, BB Investimentos, BTG Pactual, Genial, Guide, Órama, Santander Corretora, Terra Investimentos, XP Investimentos and Economatica.

Look now at the highlights of each of the selected companies for the month, according to reports released by brokers:

Present in nine of the ten portfolios monitored, the mining company remains isolated in the preferences of specialists. In a report, XP Investimentos points out that the company’s shares were boosted last month, once again, by expectations of reopening in China, after the lifting of the Covid-zero policy restrictions – which affect iron ore prices.

At Santander Corretora, Vale remains as best choice in the steel and mining sector. “We continue to see an attractive entry point for our high iron ore case for a longer time,” the institution said, expecting commodity prices to remain above US$100 per tonne this week. year.

The house analysts continue to believe in an improvement in Chinese demand in this first half and in a scenario of weak growth in mineral supply in the coming years.

On Tuesday (31), Vale announced a production of 307.8 million tons of iron ore in 2022, a volume 1.6% lower than in the same period of the previous year.

Itau Unibanco (ITUB4)

With seven recommendations, the financial institution remains in second place in the overall ranking. According to XP, the news of the judicial recovery of Americanas has aroused concern among investors for the balance sheets of the banks – generally, major creditors of the retailer -, which have recently caused their prices to collapse.

Despite the move, the brokerage reiterates its view that Itaú has the most efficient operation among Brazil’s big banks, being well positioned to address macroeconomic challenges.

For XP, the financial institution also exhibits the following differentials: a very good coverage ratio (and above the historical average), combined with controlled default rates; good exposure to fast-growing consumer credit facilities; solid track record of mergers and acquisitions, as well as partnerships; and an evaluation deemed interesting.

The company is in third place in the February ranking, with five points, tied with oil company Prio. Assaí shares are among the news of the month in the choices made by Ágora Investimentos, which highlights the second place of the retailer in the cash and carry segment in Brazil.

The brokerage says the company combines growth opportunities with a defensive profile, derived from a stable business and a strong history of consistency.

According to Ágora, the positive outlook is also based on the high yield recorded in the cash and carry segment, the company’s high sales per square meter – higher than any grocery retailer – and the projected average annual growth rate (CAGR ) for a profit of around 40%, considering the period from 2022 to 2025.

The company also received five nominations in portfolios prepared for February.

The largest independent oil and natural gas group in the country, Prio currently occupies a unique position in the industry, says BTG Pactual. For the bank, the company has a strong output growth curve, room for further cost reductions and a good capitalization, which gives it the conditions to seize opportunities that no other company could.

“And even if there are no mergers and acquisitions in the near term, we believe the company could soon pay high dividends.”

According to the institute, any negative surprises, from an operational point of view, should be limited to small delays in some projects, which maintains a convincing risk-return ratio for the investment case. BTG still maintains an “optimistic view” on oil prices.

With three debuts in selected portfolios – from Ágora, BTG and Guide – the company is the main novelty among February’s recommendations. The role still remained on Órama’s slate, racking up four nominations and opening the latest block of highlights in the sequel made by Money info.

Arezzo is Ágora’s favorite in the clothing retail sector. According to the institution, the company has been the one that has best faced the conditions of this market since the beginning of the pandemic.

“The company has been able to integrate its brand and portfolio through inorganic moves (primarily the licensing of reservations and vans), improve its digital operations, and reverse the losses of its US operations,” says l ‘brokerage.

For the institution, the strong ability to brand and identify consumption trends, accompanied by a prompt response in terms of supply and operational efficiency in pricing, give Arezzo a competitive advantage that is difficult to replicate. In this way, the company must sustain leadership in its niches for a long time.

In BTG, the choice of Arezzo is linked to the assessment that retailers exposed to high-income consumption tend to perform well even in a scenario of high interest rates.

The bank also expects the company to post solid performance in the second half. The projection is that sales grow by 35% year-on-year, mainly driven by the apparel segment.

Eletrobre (ELET3)

Another rookie of the month is Eletrobras, also with four recommendations. The company’s shares are among Órama’s February news and remained on the list of three other analyst houses.

One of the brokerage firms that has reiterated its bet on shares is XP, which has Eletrobras as its base best choice of the electricity sector. “Due to the regulated nature of the industry, it is difficult to find a privately held company that has repeatedly operated below efficiency levels for so many years and is prepared to take all necessary steps to reduce costs,” says the body.

Analysts also highlight the selection of Wilson Ferreira Jr. as the company’s chief executive officer, who they see as a strong signal that the aforementioned adjustments should happen quickly. “His long trajectory in the industry and recent experience in the company prove it.”

As for the increased perception of risk of interference by the new government, with the possibility of reversing the privatization of Eletrobras, XP says it considers this hypothesis “very unlikely”, due to the costs linked to the mechanisms for protecting minorities provided for in the articles of association of the company – clauses known as poison pills (poison pills).

“The most relevant risk is that Eletrobras will not be able to allocate the non-contracted energy at advantageous prices resulting from the migration from the quota regime to the independent product regime”, comments XP. “To address this risk, we expect the company to develop or acquire a commercial company in the near term.”

Petrobras (PETR4)

The oil giant has joined the Terra Investimentos list and totals four nominations in the overall ranking.

According to Ágora’s assessment, the shares should continue to show greater volatility in the near term, due to changes in some of the company’s guidelines. For the brokerage, there are three relevant points to observe: what will be the new rule for fuel prices, the dividend distribution policy and the guidelines for the implementation of investments (capex).

“While we believe volatility will remain elevated until there is clarity on these issues, we cannot ignore the appeal of the stocks due to their enormous liquidity at a time of strong oil prices,” the institution said.

Agora also points out that the market should be aware of the state company’s next steps in relation to its fourth quarter 2022 dividend payout. $7 billion, which would represent an estimated yield of between 8% and 10%.

A leader in business management systems and platforms, Totvs is considered the largest technology company in the country. The roles also received four nominations in the month and close the list of novelties among the most cited by specialists.

“Totvs is expected to continue to deliver positive results in its core division (management), likely supporting approximately 15% growth in recurring revenue through 2023, and as such, we see lower risk of potential earnings revisions,” the Agora indicates. .

The institute also believes that the company’s shares are the safest within the technology sector to navigate in an environment of heightened market volatility.

Related