Brazil is having its Argentina moment. How to play it
Todd Gordon's way to play it is Petrobras (PBR), Brazil's state-controlled integrated oil major.
TL;DR
- Energy and technology are the only dominant sectors in the S&P 500 this year, far outperforming other sectors.
- Brazil's stock market has shown significant gains following its presidential election, with the Ibovespa and iShares MSCI Brazil ETF (EWZ) jumping.
- Petrobras (PBR) is highlighted as a way to gain energy exposure, benefiting from oil production and high diesel crack spreads.
- PBR's stock has broken through resistance levels, offers a 5% yield, and trades at a low multiple of forward earnings, suggesting it is undervalued.
- The author plans to add a 2% allocation to PBR in dividend and growth portfolios for integrated oil and refining exposure.