Tuesday, January 12, 2010

Investing in Brazil? The Cheapest Sectors

A report released this week by Itaú Brokearage compares the price of the shares of Brazilian companies with the share price of their peers in the larger markets. The conclusion: on average, the Bovespa is not that expensive in comparison. But there are sectors that are cheaper than others.

We track all latin-american ADRs live here.

According to the survey of Itaú, the sectors are the cheapest are banks, consumer, technology and utilities. The calculation is based on the index price-earnings of companies in these sectors (this index measures the relationship between stock price and the company's annual revenue projected for 2010, the lower, cheaper is the action).

Among the most expensivesectors are the energy and telecom. On average, the index price-earnings Bovespa is 13.7, much lower than India (16.4), China (14.1) and Mexico (14.3). It is only larger than the index of Russia, which is 7.9.

Here are the P/Es per sector:

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