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The 2014 Latin America Research Team: Retailing, No. 2: Joaquín Ley & team

Joaquín Ley & team Itaú BBA First-place appearances: 1

Total appearances: 7

Team debut: 2008

Itaú BBA slips from first place back to the No. 2 spot it earned in 2012. Its team under the direction of Joaquín Ley has three members working from offices in Mexico City and São Paulo, and plans to increase that number by the end of this year. Tracking 30 companies, the researchers see Latin American retailers as expensive. “We remain somewhat cautious from a valuation perspective, although Mexican and Colombian names should enjoy better earnings momentum,” says Ley. “In Chile and Brazil we are expecting a material deceleration in 2014 in economic dynamics. Yet valuations for Brazilian names are materially lower than those for Mexican, Chilean or Colombian. Beyond the top-down approach,” he concludes, “we believe that stock picking will become more important than ever to select companies with unique, differentiated stories.” Investors appreciate Itaú’s efforts on that score. “All Ley’s calls about the supermarkets and department stores in Mexico have done very well,” reports one client. An example is the researchers’ coverage of Wal-Mart de México. They started 2013 with an underperform rating on Walmex, at 41.95 Mexican pesos, believing that the stock’s valuation was far above a level that the regional giant’s operating performance justified. By December it had tumbled to 34.31 pesos, dropping 18.2 percent and lagging its peers by 1.4 percentage points. That prompted Ley and his colleagues to upgrade their rating to market perform. Walmex’s shares subsequently inched up 1.6 percent, to 34.87 pesos, against the sector’s 4.6 percent gain.


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