CSAN - Cosan: Well-Run Undervalued And Leveraged To Growth But Punishingly Complex

• High oil prices should drive increased demand for ethanol, and Brazilian ethanol prices have been moving higher, while global sugar prices remain at historically attractive levels.
• Cosan's Raizen is well-placed to benefit from higher sugar and ethanol prices, but production volumes may well remain constrained by the impact of poor weather on sugarcane harvests.
• Rumo is an attractive multiyear growth story, as the company continues to invest capex in expanding the rail/terminal network and capture more share in an under-penetrated market for grain transport.
• Cosan will always be a complex investment, but management has shown good judgement with its capital allocation decisions, and this is a stock worth considering below $20.

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