 Good day, fellow investors! I've just written a short report for my research platform where I analyzed 15 Brazilian stocks, discussed a little bit what are they interesting or not, what stocks will I focus on and today I'll share that preliminary research. I hope you enjoy it, perhaps you'll find some investing ideas. These are the stocks, so 15 stocks, the most important stocks from Brazil that can be invested from the New York Stock Exchange. So, let's start with the first and go to the latter one. ABEV, ABF, AMBEV is a good company with high margins, slow growth, a mode, strong brands, selling beer in Canada, in Latin America, high return on equity, high return on investment capital just below 40%, negative working capital and no debt. However, it trades at the consensus price earnings multiple of 20 and here it all boils down to whether you are a relative investor or an absolute investor. A price earnings ratio of 20 for a company like ABEV is cheap because it usually has a price earnings ratio of 30 because of its stability, beer, recession proof, no debt, high return on investment capital, everything is there and everything looks good. However, you have to pay a price for it. Price earnings ratio of 20 for me, it translates into 5% yield, it's a stable company, not huge growth expected there, so I'm not satisfied with that. I would prefer to invest somewhere else for such a yield, I don't know, Berkshire. So that's why I'm not going to invest, so if you are a relative investor, it is definitely an intriguing price to look at now. Now, another company very interesting is Brazil Agro. It is a small company and it's one of Brazil's largest companies in terms of arable land and its core business consists of the acquisition, development, the operation and sale of rural properties suitable for agricultural activities. So their business model consists of acquiring rural properties that are not fully developed or not developed at all, transform them into profitable agricultural land and then sell the properties at a profit. This summary, they have a lot of acquired land during the last 10 years, mostly in 2007-08 and they develop those slowly, grow crops on them, soy, corn, cattle, whatever and then when they have an opportunity to sell such land, they do that. According to the company and Deloitte, the value of the land is now at 1.3 billion reals that translates into $22 per share or $6. The price is about $3.5 per share. However, the accounting value is lower and the book value is $12 reals per share or $3.4 per share, close to the price. They have been selling some farms recently but not really that much. So the question is when will that value get unlocked? They will probably slowly sell and unlock that value but that might happen over the next 10 years. There are always ecological issues there with deforestation in the Cerrado, if I say that correctly in Brazil, the majority shareholder is Cresude, an Argentinian company, so that's also something to think about when investing in Brazil. And of course, here also the management says that when they get a good price for the farm, they sell it. If not, they keep producing on it. So all the past sales are really cherry-picked sales on all the hectares. If they would have the opportunity to sell everything, they would do that, buy new land and then resell it. So that's not going really that fast. You own that land, yes. So if you're interested in land stocks, this might be an interesting one. However, before that I have to analyze other land stocks that are there from the Hawaiian stock, from Chilean stocks, US stocks, all related to land and then compare to see what's the best hedge if you want to be owning land. Braskem is another, is a petrochemical company, cyclical with volatile earnings. On top of that, Lyondale started talking with Braskem's owners about a potential transaction. This pushed already the price higher, 70% lately, but what's more important is the stock is five times higher than what it was over the last few years. The company has been enjoying strong margins in the polyfine segment, but the new supply or recession might change that. So that's a clear cyclical. You see the stock going up five times in the last few years. If I go back, the five-year average earnings are just below four reals or just around one dollar. That gives me a five-year price earnings ratio of 25, which is expensive for me. Plus with already the acquisition being there, it's not much bargain hunting territory here. Okay, BRFSA, it's talking about bargains. This is a bargain and the stock is down 60% year to date. The reason because of the downfall is the Operation Week flash, where even the European market was closed for the company and its poultry operations. They had a lot of losses, a lot of problems with some scandals that happened. So input prices are going higher. Other poultry companies in the US like Pilgrim's price is also declining. So this is really a big, big turnaround story. And if we look at Berkshire's criteria for turnarounds, we see this. We look for demonstrated consistent earning power. Future projections are of no interest to us, nor are turnaround situations worn and buffeted. So why is he saying that? Because probably the average return is negative on turnarounds. So you might see the big stock that explodes 10 times, but 9 go bust for that one that exploded. And that's why he doesn't like turnarounds. Similarly with BRFS, we don't know what will happen then. They have a new CEO that restructured Petrobras in the past that worked well. So we'll have to see, okay, what's the margin of safety? The price to book is still a little bit below the current price. So we'll see if the turnaround starts good, the stock price will shoot up. If there is more trouble, the stock will go down and perhaps then later shoot up. I would love to see it at a better margin of safety. So I'll analyze the stock in that, perhaps also make a video on this if it's not too good that I keep it on the research platform. As said, there is still good business. They're going to sell five real billion of assets divest in order to focus on what they do best, which is Asian, Middle East and African sales. I don't know how to pronounce this in Portuguese, but CID is a steel producer and extremely dependent on the economy. Things are good now, but you never know for how long. I prefer to look at such stocks in a downturn. This is what the company depends on. Automotive, capital goods, construction, everything is growing as the Brazilian economy has been growing up till now, but the growth projections have been readjusted. Give me a good recession and then I'll look at all those cyclicals when they're cheap, not when they're expensive. Also, CID is a very capital intensive business, so not much left for shareholders. Cosunlimited is a very complex company with sugar production, gas and fuel distribution, lubricants, ethanol and rail. It's also recently acquired Shell's downstream assets in Argentina for less than one billion. The issues here are, sugar prices haven't been good lately and it will impact the company, increased supply from Europe and India might keep the price down. Here, what is necessary is really a deep, deep earnings model, long-term model of each of their businesses, and I'm going to do that because it might be interesting to have that model and take advantage of when such a company drops below the intrinsic value at a margin of safety because that might happen. It's really a complex company, a lot of moving parts and that's something you have to have an earnings model on. So that's my next step on the to-do list. Embryer, I just made a video about the company, discussed it. This is for my research platform, so I tell what's my issue with it. I don't know if it is a sound investment now, even if the risk reward is positive. Their production orders and backlog are cyclical, there is always the North American risk and they're mostly exposed to the US, which is something I wouldn't want that much, especially at deep price. Further, if peak cycle earnings are free, average will be around 1.5, giving me a 10% yield only at 15, so at 25 is a bit too expensive for me. Estreambiental is a new IPO. We'll discuss three of those here because they took advantage of the positiveness going on in emerging markets at the end of 2017 and then you see a lot of IPOs and the shares really drop after that. I don't see, I looked at the financial statements, I don't see the value of waste management is a complex business and this can be seen by how the Sao Paolo government really immediately lowered their prices, keeping contracts short-term and really they have no bargaining power because they cannot bargain with the government. So losses there, piling up, growth slow, I really don't see it or it is too risky for me, so I don't know the situation there. Now Fibria Celluloza is a company that benefits from weaker real and it's because its sales are in dollars and its costs are in reals. Produces pulp, paper pulp, tissues, what you use when your nose is leaking, but it also shows what happens when, how value eventually gets unlocked. There was paper market issues back in 2016, but the company was doing well. I really liked it back then. Now it will be acquired by Susano for 10 billion, so the company is trading there and you see, okay, what can happen to a company that has a lot of value, long-term prospects and is cyclical, yes is cyclical. So again from five we went to around 20 with a good company. These are the companies you have to find. The company is also invested in growth and everything, so it was a great long-term investment. Gafiza is a Brazilian home builder that was hardly hit in the last recession and by its own mistakes. It managed to lower its book value from above 100 to the current 11 dollars. The last financial report was a positive, but the company still depends on economic growth in Brazil. Important to analyze the risk reward in detail here, but the stock is not from the faint hearted. Again something I'll do. Gerdao, another steel producer and the fifth steel company, North America, Brazilian company, it looks like a good company that has had positive or operating cash flows for each of the last 10 years. This leads to dividends and it seems like a good company. However, the average free cash flow was 25 cents per share, tells me Gerdao is a bit overvalued or it's an expensive stock for my taste. Golinha's airline in Brazil, South America, is a stock that I have looked at it when it was trading at $2 back in 2016. Then it spiked to above 12 and now it's back to below 6. I didn't buy it then, let me see if that's still the case. It is a South American airline and it had huge losses and then it turned to profits and that's why the stock spiked from 2 to 12 or for 1 to 12. If you can spot those, you make huge returns. However, you have to invest in companies that have negative book values and usually huge debt levels, which is the case with this company. The company revised EPS estimates down for 2018, that's why they are down now from 0.7 to 0.5 dollars per share. EPS for 2019 is 1 to 1.5, so this should be a P-Ratio 2019 between 3 and 5. We'll see about that. I stick to my strategy of not investing in companies with negative book values, even if I might be wrong. I prefer to keep my life and investing. Next resources, a Zinc Miner that recently listed on the New York Stock Exchange, to be definitely checked when I look at the Zinc sector again. Fortunately, Zinc prices are going down, so there might be opportunities. Net shoes is another recent Brazilian IPO that took advantage of the hot emerging market IPO, but since then it really did poorly. It's 88% down. It's an online fashion platform from Brazil where the online penetration is just 2% for Latin America. They are expanding, but they managed to burn 345 million reais in the first quarter. With such investments, you never know when and if something will happen. That's the risk reward. Total loss or the next Amazon. There is no in-between there and it seems with the stock price that the market is thinking it will be a total loss. You never know when will what happen and not really something that I would recommend in my model long-term portfolio. Telecoms. I really don't like telecoms and especially not at high valuations which are, which is the case now where we have above 10, above 15. Also, you see what's going on with telecoms when you look at the stocks like OIBR with judicial restructuring plan in progress now. So too complicated. Conclusion. I have to analyze Kozan, Adecoab, Agro, Gafisa and Nex in detail to have a model and then to wait for the stock price to be there at the right price for the right risk reward long-term investment. The more analysis you have like that in detail, I'll share some of them here on YouTube. So please subscribe. The more analysis you have like that, the easier it is to invest with low risk, high return. Thank you for watching. Looking forward to your comments. Did I miss anything? Let me know and I'll see you in the next video.