LNSTY - B3: Strong Balance Sheet And Macroeconomic Tailwind - Buy

2024-03-19 03:27:24 ET

Summary

• B3 is the dominant player in its stock exchange market in Brazil, and with its long history and strong investments in infrastructure, it has irreplicable assets.
• The company has a strong balance sheet, dividend paying cash cow profile, high margins and an excellent return on equity.
• Additionally, it is trading at a large discount compared to its international peers, which have marginally worse financial indicators than the company.

Investment Thesis

I recommend buying B3 ( BOLSY , BOLSF ) shares, which are trading at discounted multiples compared to their international peers despite their healthy balance sheet and business model. Additionally, B3 has a dividend-paying cash cow profile, and it could be an excellent thesis that combines share appreciation and dividend payments with the improvement in the macroeconomic environment for stock exchange trading in Brazil.

Introduction

B3 is one of the main infrastructure providers for the Brazilian financial market. The company has approximately 2,700 employees and operates in a diversified and vertical model, where it offers services (such as trading, lending, depository clearing, settlements and transaction repository) for securities traded on exchanges and even over-the-counter (derivatives and commodities)....

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