Portfolio Potential in Brazil

15 Aug, 2011Featured, Top Stocks

It’s no secret that navigating the financial market is no easy task, especially when so many investors are eager to jump out of commitments and wait for safer tides. This makes it particularly difficult for the less than avid market goers such as myself to really understand the trends and make some wise decisions during these economic times. I was recently discussing this issue with a gentleman who happens to be much more informed about the situation than I and he suggested that I do some diligent research into possible Brazilian stocks or from an equivalent country. He though that perhaps this would help guide me on my quest to better understanding of how the market flows in general since I would be getting an unbiased view of a company that I haven’t really heard of before.

So I did some research into Brazil’s financial world and pinpointed a particular company I know is doing well. Wall Street News listed Banco Bradesco as a top stock, among 24 other equally ambiguous firms to me. This firm provides banking and financial services to both individuals and companies along with some international corporations. I found it very interesting that this company is the largest insurance and pension provider in the country, perhaps something that distinguishes it from American firms of this nature that don’t really seem to dominate an area like this along with private sector. It is this private sector branch and service network that is also the largest in Brazil, with over 3,000 branches around the country. Having some international branches also seems to make the firm more appealing since it is located in New York, Luxembourg and Tokyo as well.

I’m not exactly sure what the American equivalent to Banco Bradesco currently is, but I am curious to learn more about what drives the company to such success, as well as what drives the nation to such success in the current times. The stock for this company trades at 9.5 times forward earnings and I discovered that it pays a yield of 0.6%. I may not be the most savvy market guy, but I do know that this is pretty successful and would be a good addition to my portfolio. So I ask for any insight into this particular company and the science behind the good numbers since so many American banks are sinking. Should I not be deceived by the preliminary research? Is there more instability than I am aware of? Now that I have looked into this situation and that of other banks in Brazil, I am much more interested in learning about the bigger financial picture with this country and will surely be investigating further.