Cosan: I Was Wrong

2025-02-05 10:31:04 ET

Summary

• Brazil faced economic deterioration in 2024, with rising interest rates and challenges that have impacted Cosan's valuation.
• Moove's failed IPO and Vale's misallocation of capital have damaged market confidence.
• Cosan has revamped its board and sold off Vale shares, finally addressing its leverage issues.
• Despite the misjudgments, Cosan remains undervalued, and this could be an opportunity as momentum in Brazilian assets improves.

Investment Thesis

I reiterate my recommendation to buy Cosan ( CSAN ) shares. Without a doubt, Cosan was my biggest reading mistake in 2024. Since my buy recommendation on April 1, 2024, the Brazilian economic scenario has worsened considerably, while one of the risks in Cosan's thesis has materialized....

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