Latin America Ablaze
Mary is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
The prospect of continued interest rate reductions in Latin America’s largest economy has buoyed Brazilian stocks recently. Brazil’s inflation rate is now at its lowest level since September 2010. Brazil’s Finance Minister Guido Mantega said the current level of inflation provides “a degree of liberty to have more flexible monetary policy,” presumably to include lowering interest rates and expanding credit.
Brazil’s Vale (NYSE: VALE), Petrobas (NYSE: PBR), and AmBev (NYSE: ABV) have all seen increases based upon this prospect. Vale is the second largest mining company in the world. They are headquartered in Brazil but operate in 38 countries. Vale is the global leader in iron ore and comes in second in nickel production. As such, Vale is a large company worthy of investment. It holds long-term value for the opportune investor.
Petrobas is the 3rd largest energy company in the world. In terms of market size they are the largest company in Brazil. Their oil and gas exploration and production activities span the globe. Petrobas is a staple in terms of Brazilian investment. Most analysts and commentators either love or loathe the stock. But its potential for growth and determination to expand is clear, making it a great value if it can be caught at the right price.
AmBev is the largest beer company in Latin America and the largest retail company in Brazil. They are present in 14 different countries throughout the region. Anyone familiar with the Latin culture is well aware that beer plays a big role. Bigger, even, than tequila. AmBev’s brands are favorites in the region. This is a positive stock with potential to expand its current distribution.
Other Latin American companies such as Argentina’s YPF (NYSE: YPF) also saw the positive impact of Brazil’s economy. YPF is Argentina’s largest oil and gas company. Argentina is home to many natural resources, and YPF plays suit to those resources. Also, as regulations line up in this country, companies such as YPF will have even more room for growth.
Latin America is ablaze with investment opportunity. Most eyes are on Brazil. That is warranted. Brazil offers a huge value with plenty of resources to back it up. However, Argentina is a star on the rise. Argentina reminds me of what Brazil use to be and Brazil reminds me of what Argentina can be. Brazil is climbing the charts in profits and Argentina is just emerging. Both areas as well as great stocks like Vale, Petrobas, AmBev, and YPF offer great investment value for the long-term.
MaryPosey has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Petroleo Brasileiro S.A. (ADR). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.