The reopening of the economy in the country’s main cities on the eve of the heat season, starting spring now in September and summer in December, will help the businesses of several companies that have been suffering from the impact of the pandemic for almost a year and quite.
This movement should favor the actions of several companies that are related to the tourism industry, such as airlines, tour and concert operators, road concessionaires and even fuel resellers, say market professionals. See below seven stocks that could benefit from this coming summer and whether these roles are worth putting in the portfolio, according to analysts.
Vaccination is the difference in 2021
Brazil has already gone through a wave of economic recovery in the last two months of 2020, when the movement of people increased sales in various sectors of tourism and leisure. But the second wave of covid-19 canceled all the gain and brought down the companies’ revenues. This time, market professionals highlight, the difference is that we have a vaccine.
The percentage of the population vaccinated with at least one dose surpassed the level of 60% of the population and the rate of new doses applied is between 1.6 million and 2 million per day.
“Now, the recovery is much more solid”, says the secretary of Tourism and Travel of the São Paulo state government, Vinicius Lummertz.
Starting with domestic
The increase in spending by Brazilians in the tourism industry in this final stretch of the year will start with domestic tourism.
This will happen for two reasons: most of the airports are still closed to those who travel from Brazil to countries like the United States and Argentina, which form, alongside Portugal, the three main destinations sought by Brazilians. In addition, the dollar is valued and makes international travel more expensive.
This movement represents direct money in the vein of companies operating in the sector. The expectation of opening alone favors the actions of these companies, as many investors anticipate.
Rafael Antunes, partner at Inove Investimentos
See 7 actions that will benefit this summer
Market professionals heard by the UOL listed seven actions that should benefit from the greater circulation of Brazilians within the country, doing tourism, seeking leisure, entertainment and travel. See what they are:
- Goal and Blue: airlines are among the companies that have suffered most from the impact of the pandemic on the economy. But the air network, which was reduced to practically zero in a few months of 2020, is now close to 70% of what it was in 2019.
The projection of Abear (Brazilian Air Companies Association) is that by the end of the year 90% of the network will be operational. These companies have higher profit margins on international flights, it’s true, but just the fact of returning to flying with full planes justifies the resumption of earnings.
- CVC: the largest tourism company in Brazil and Latin America is the only company in this sector with shares traded on the stock exchange. The group had been suffering even before the pandemic because of internal problems.
But now, fully capitalized after new shareholders injected R$1.1 billion into the operation, the company is going to swim with the arm in a market where it is the only one with a truly national scale to serve tourists.
- Time for Fun: the promoter of concerts and events had to shrink in size to get through the crisis, but managed to save cash to take advantage of the return of the concert and event calendar in Brazil. Abroad, the shows and shows that started to be sold sold out very quickly. Analysts believe this will be repeated in Brazil.
According to RB Investimentos strategist Gustavo Cruz, the company should also take advantage of another factor: many international attractions will have no dates for presentations in the northern hemisphere with so many artists trying to achieve the agenda that was left behind. So more international tours should go through South America.
- CCR: the company operates in three segments that were affected by the pandemic and that will now benefit from the resumption of tourism. In highway concessions, the company manages businesses such as the Presidente Dutra Highway, which links the two most important metropolitan regions in the country. These operations will certainly benefit, analysts say.
The company is already running with traffic at levels higher than 2019. In urban mobility, it operates transport, such as the subway in São Paulo and Salvador and the VLT in Rio. These businesses are already recovering the revenue they had before the pandemic.
But the flow is still below what it was in 2019 and, therefore, there is room to grow, albeit in a non-linear way, highlights Gabriel Marzortto, partner at Quasar and manager of the Quasar Tropos FIA fund. At airports, the company operates the Confins international airport, in Belo Horizonte. This CCR business segment is still suffering from the pandemic.
- EcoRodovias: with 10 concessions in eight states, the company has 3,000 km of highways through which 352 million vehicles traveled last year. This volume will grow in this final stretch of 2021 and 2022 with tourists who take short trips or who do not yet want to travel by plane.
- Raizen: vehicles need fuel to run. And the company controlled by Brazilian Cosan and British Shell, which operates Shell stations, will benefit from the increased circulation of cars, buses and trucks across the country in this season of economic reopening.
Is it time to apply now?
Analysts heard by UOL highlighted that many of these shares suffered devaluation during the pandemic and, therefore, some of them have an interesting price when analyzing some indicators, such as business size, revenue potential and profit in relation to the share price.
But these same analysts reinforce the recommendation to invest in stocks with a long-term objective. The partner at Quasar, for example, says that he builds the theses of his portfolios looking at a horizon of at least three years.
With the return of the crisis, the market will consolidate because the leaders who are traded on the stock exchange should benefit from the recovery more than the small and medium-sized ones. But we emphasize that this is not an investment that we are looking at only for the summer and high season.
Gabriel Marzortto, from Quasar
Another point of attention raised by some professionals is related to the weight that these shares can have in an investor’s total portfolio.
The more volatile a company’s price on the stock exchange, the smaller the share of that role in a person’s investments should be. Especially for investors who do not have a bold profile, with the stomach to withstand strong fluctuations without despair.
Gol, for example, dropped to BRL 5.60 in March 2020, then surpassed BRL 27.00 in December 2020, and is currently being traded at BRL 19. Before the pandemic, the air fare was traded at R$37.80.
Azul, in the same period, fluctuated between R$10.35 and R$48.20, and today it is worth around R$36. Before the pandemic, it was worth almost R$60.00.
Looking at tourism as an industry still underexplored in Brazil in relation to GDP, it is worth investing in this segment with a long-term focus, because at some point the summer ends, Carnival passes and investors should not see this as a seasonal investment.
Gustavo Cruz, strategist at RB Investimentos