I can’t remember a time in my career when I thought about these stocks so much.
One of the first things I do every morning is check the BRL/USD pair and Bovespa.
That tells me all I need to know about how my Brazilian ADRs are trending. I’ve built positions in a number of them just recently.
Some are doing well, others like PBR and VALE, not so much.
But, here’s the thing. Investors are dumping their USD exposure and looking around the globe for new opportunities.
I think this has a lot less to do with trade war narratives and rumors, and a lot more to do with the fact that the US has dominated the investment world for a decade and a half.
America has been the only game in town for anyone looking to generate alpha.
Of course, it couldn’t last forever.
Stocks around the world are dirt cheap compared to the premium multiples found here.
For example, my two favorite Brazilian ADRs are trading at single-digit P/E multiples right now.
Here’s a look at Stone Co $STNE and Pagseguro $PAG:
Both stocks are taking out their VWAPs from the 2024 highs as they put the finishing touches on tactical reversal patterns.
I’m long above these VWAPs, and I think much larger rounding bottom patterns will complete in the future as they eventually embark on new structural uptrends.
And it really comes down to the Brazilian Real for these international stocks. BRL is a volatile emerging market currency and will end up driving a lot of the performance.
Here it is scooping back above a shelf of multi-year support.
As long as BRL is above 0.17, I want more and more exposure to this region of the world.
I have a feeling we’ll be talking much more about Brazil in the future.
In fact, Breakout Multiplier members just sold a double in STNE calls this morning. We got in last week in anticipation of this breakout.
Join us risk-free and catch our next move on Brazilian equities. I think they’re just getting started.
Steve
P.S. Kenny held a live event today. If you didn’t see it, and you’re interested in trading volatile environments like the one we’re in, you need to check it out. There is no one better suited for these times. Not only is Kenny one of the most seasoned traders I know, but he’s having as much fun as anyone out here. His room is an absolute blast. I know from experience. Find out for yourself.
