Thiago Duarte & team BTG Pactual First-place appearances: 1
Total appearances: 4
Team debut: 2008 BTG Pactual’s São Paulo–based squad advances from second place to claim the firm’s first top finish on this roster. Thiago Duarte steers the team of two in covering eight Latin American agribusiness names and is somewhat cautious going forward. “We continue to see a challenging environment for sugar and ethanol companies, with a mixed ethanol pricing outlook and lower sugarcane availability resulting from the drought that affected the region in the beginning of the year being only partially offset by an improving sugar price outlook,” the 30-year-old team leader explains. “Additionally, we expect mounting grain inventories globally, as a result of improving corn and soybean crop volumes, to translate into falling grain prices, negatively affecting the profitability of grain exporters.” The analysts are selective over the long term, “mainly due to low historical returns and high exposure to volatile commodity markets,” he adds, preferring “vertically integrated, diversified players” that demonstrate sound cost management and are positioned to thrive in a challenging environment. An example of such a company is Brazil’s Cosan, whose products include biofuels, ethanol and sugar. The manufacturer “should continue presenting growing earnings [from] recent investments in infrastructure and energy assets,” Duarte notes. “In that sense, we believe Cosan remains a valuation rerating story on the back of growing cash flows, as we expect marginal returns to continue trending higher.” BTG’s researchers also have a positive outlook on São Martinho of Brazil and Luxembourg-headquartered Adecoagro, a long-standing favorite. These sugarcane and ethanol producers are “two of the best-run companies,” he asserts, “boasting higher-quality mills and superior cost management, which should continue to translate into stronger cash flows and higher cash returns to shareholders in the near term, in spite of the sector’s overall tough momentum.” Duarte holds a bachelors’ degree in economics from Brazil’s Universidade de São Paulo and tracked Brazilian consumer stocks at U.K. buy-side firm Schroder Investment Management before joining BTG in 2009. This year he also co-captains, with Rafael Shin, the top-ranked team in Food & Beverages.