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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (25924)	2/5/2007 8:14:59 PM
From: E_K_S	Read Replies (1) \| Respond to of 78511

Hi Paul Senior - Both VCP and ARA have underperformed the iShares MSCI Brazil Index (EWZ) over the last 24 months. finance.yahoo.com The two year comparison shows that the "index" is 40% higher than ARA and 80% higher for VCP. Most of the gain for the index is from oil related stocks. Here is the list of holdings for the index: finance.yahoo.com Notice that the average PE for the group is below 12 which is a good value (and does provide a hedge against a falling U.S. dollar). Maybe a better way to invest in Brazil is to just buy the ETF. I believe there is a better value proposition with VCP & ARA as long as one keeps their position small. My total position is less than 1% of my taxable portfolio. Too bad I missed investments in Brazil over the last 24 months as the index is up over 140% during this period. EKS

To: Paul Senior who wrote (25924)	5/16/2007 11:32:11 AM
From: E_K_S	Read Replies (1) \| Respond to of 78511

Hi Paul - I was doing more research on VCP (Votorantim Celulose e Papel S.A.) and was surprised to find out that they are a major shareholder in ARA (Aracruz Celulose S.A. ). en.wikipedia.org From the article"...Four major shareholders control the company's voting shares: the Safra Group, Lorentzen and Votorantim (each owning 28 per cent of the voting shares) and BNDES, the Brazilian National Economic and Social Development Bank (12.5 per cent)..." . Based on the PE and book value of both companies, it appears to me that VCP is undervalued given ARA's current market price. I am not sure why the market have them priced this way, but I now hold equal amounts of each based on my total dollars invested. My direct investments in companies that are headquarted in Brazil include RIO (Companhia Vale do Rio Doce), VCP (Votorantim Celulose e Papel S.A.) and ARA (Aracruz Celulose S.A.) and as a group they represent less than 2% of my taxable portfolio. I do hold positions in other conglomerates that have operations and interests in Brazil, specifically BHP (BHP Billiton Ltd.), but their investment is small compared to their total market cap. Good find on VCP and bringing it to my attention. EKS