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The 2014 Latin America Research Team: Financials/Nonbanks, No. 2: Alexandre Spada & team

Alexandre Spada & team Itaú BBA First-place appearances: 0

Total appearances: 3

Team debut: 2012

Alexandre Spada leads his Itaú BBA troupe to a repeat second-place finish on this roster. “No one puts as much thought into details as Alexandre does,” insists one investor. “That makes his numbers the most reliable on the Street.” Based in São Paulo, the group of three covers nine stocks and plans to add two by year’s end. Latin America’s nonbanking financials climbed 17.4 percent over the first six months of 2014, compared with the broad regional market’s 1.3 percent advance. “The sector had an outstanding performance in the first half of 2014, with all the companies we cover in Brazil beating the Ibovespa — some by wide advantage,” remarks Spada. Bolsa Mexicana de Valores was an exception, however, and underperformed the Mexbol. “For the rest of the year, we would not expect all Brazilian companies to continue to outperform, as some valuations are quite stretched at this time, particularly Cielo and BM&F Bovespa,” Spada notes. “We would also not bet on Bolsa Mexicana as an outperformer in the period.” The analysts do, however, favor Brazil’s Smiles, the air miles arm of airline GOL – Linhas Aéreas Inteligentes. It is their their top pick because “earnings momentum continues to be quite compelling, and the company has been introducing several innovative and successful products to the loyalty industry in Brazil, which may contribute to the maintenance of favorable results as those initiatives mature over time,” he says. Moreover, owing to “some interesting accounting features, Smiles is poised to show compelling revenue and, therefore, earnings-per-share growth rates until 2016, quickly diluting its price-to-earnings multiple,” Spada adds. His group is also recommending Brazil’s Cetip, which organizes that country’s over-the-counter markets, thanks to its stable earnings, protection against inflation and high payout ratio.


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