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The 2014 All-Brazil Research Team: Health Care, No. 2: Rafael Frade

Rafael Frade Bradesco Corretora First-place appearances: 0

Total appearances: 4

Team debut: 2011

After three straight years in third place, São Paulo–based Bradesco Corretora analyst Rafael Frade advances to the No. 2 position on this lineup. Clients appreciate his “in-depth historical knowledge,” as one fund manager puts it. Another backer lauds his “consistent views that don’t bend with the wind.” For example, Frade earns investor praise for maintaining his outperform rating on São Paulo’s Qualicorp since June 2012, crediting in part the corporate insurance administrator’s top-line growth. Two years later, with the shares up 49.1 percent since his recommendation, at 24.81 reais, Frade raised his target price to 28.20 reais, citing larger-than-expected price increases. At the end of the following month, Qualicorp closed at 26.25 reais, for a life-of-call gain of 58.1 percent that paced the sector’s performance by 25.2 percentage points. But critics lament the analyst’s April 2013 upgrade of São Paulo–based medical services provider Fleury, which he boosted from market perform to outperform because of its expansion plans. In March management announced that Gávea Investimentos, a private equity unit of U.S.-based J.P. Morgan Asset Management, was interested in acquiring a controlling stake in the company. But that same month, Fleury posted a net loss for fourth-quarter 2013, and the next month it advised markets that sales would not meet estimates. The Gávea deal failed to advance, and by the end of July, Fleury’s shares had been pummeled, losing 20.6 percent, to close at 14.92 reais, while the sector climbed 18.8 percent.


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