2024-05-29 20:52:27 ET
Summary
- The EWZ tracks the performance of the MSCI Brazil index, which is dominated by commodity stocks and characterised by a high dividend yield and cheap valuations.
- Sentiment towards Brazilian stocks has been undermined by the government's decision to replace the CEO of oil giant Petrobras, raising fears of further government intervention into the corporate sector.
- The ETF is extremely undervalued relative to its own history and EM peers, and its high FCF and dividend yield suggest it should outperform even if the discount remains intact.
- As we saw in the early 2000s, rising commodity prices have proven to paper off the cracks of poor policy in the past and recent commodity strength should support EWZ.
...
Read the full article on Seeking Alpha
For further details see:
EWZ: Worth The Risk Despite Lula Intervention