action is an alternative to bet on the Brazilian economy

This is the partial online version of this week’s edition of the newsletter A Companhia, which analyzes whether or not it is time to buy CCR shares and the positive and negative aspects of the company. In the complete newsletter, only for subscribers, see the company’s perspectives, which profile it is suitable for, if it is cheap and what are the recommended purchase and sale values. To subscribe to the weekly newsletter and access the full content, click here.

The highlight of the week in the newsletter The Company is CCR, chosen by Matheus Jaconeli and Bruna Sene, analysts at Nova Futura Investimentos.

According to specialists, the company is one of the leaders in road concessions and, with the economic recovery, tends to benefit from the greater use of roads for logistical flow — which increases toll revenue.

They also point out that the group should reap the rewards of the recent vacation period, which traditionally drives traffic on the highways.

“As for the fundamentals, the company presented a great balance, reducing leverage and increasing profitability”, says Jaconeli. In the first quarter, CCR had a net income of BRL 3.45 billion, five times the amount recorded in the same period in 2021.

The company’s next financial statement, referring to the second quarter, will be released on August 11.

After falling 12.8% in 2021, CCR shares (CCRO3) are up 13% this year, until July 28.

Learn more about CCR

The company operates in the management of highways in Brazil, with concessions concentrated in São Paulo, Rio de Janeiro and Paraná.

The group also has businesses related to airports, mobility and services in the area of ​​engineering, technology and administration, being one of the biggest players in the infrastructure sector in Latin America.

CCR was the first to join the Stock Exchange’s Novo Mercado (in 2002), a segment in which companies voluntarily adopt corporate governance practices in addition to those required by law.

Why are CCR’s shares an opportunity to invest?

Jaconeli says that company papers are a good alternative because they are at a very discounted (cheap) price level.

In addition, he states that the company presents a series of important fundamentals that are favorable. He highlights the net debt/EBITDA of only 1.87. The index reflects CCR’s leverage level – considered low.

He also mentions the attractive result in terms of return on equity, of approximately 30%.

“It is a way of being exposed to the Brazilian economy without the very cyclical components of the retail sector, for example”, says the analyst.

points in favor

  • It is among the largest highway and infrastructure management companies in Brazil, with a large geographic presence, which is important in a country where transport is mostly by road;
  • Mobility data continues to advance, and economic activity tends to increase throughout the year, which benefits CCR’s business;
  • Low financial leverage, which leaves the company well positioned even with high interest rates.

points against

  • The economy is expected to grow less in 2023, which reduces the mobility derived from trade and the delivery of goods through highways – business that represents the highest percentage of the company’s revenue;
  • Risk of governments prioritizing public investment, which could impact business in the long term, as the group has benefited greatly from concessions and partnerships in infrastructure focused on the private sector.

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