All of these 20 stocks are listed in Brazil’s Bovespa and lost more than 40% ytd. Some of them are also listed as ADRs, like Gafisa (NYSE: GFA) and Gol (NYSE: GOL).
Together, these companies lost R$ 44.5 billion in market value in less than 12 months. The worst company on this list is Laep Investmentos, a holding company that owns Parmalat and Daslu. Its paper lost a whopping 92.4% this year, bringing down its market value of R$390 million to R$45 million in only 10 months.
Two Brazilian retailers listed on Bovespa also deserve a special mentioning here: B2W (the holding company of Americanas.com and Submarino), which fell 66.18% this year, and Hypermarcas which crashed by 63.80%.
Most of these companies have two things in common: high debt and disappointing earnings. They would have suffered even without the EU crisis.
One clear example is Marfrig, which fell 50.28% this year. The paper has been hit especially hard because of heavy losses of hedge fund GWI, which was extremely leveraged and had to liquidate its company stocks to cover margins.
The investor must understand the macroeconomic scenario in order to invest wisely. Months ago, for example, Gol would have been a good buy (rising revenues and earnings) if it was not for the worsening of the crisis and the rise of the dollar (pushing up the costs of oil and debts in foreign currencies).
Other stock performances to compare to iBovespa index (-18% ytd):
– Petrobras (NYSE: PBR): – 18.5%
– Vale (NYSE: VALE): – 9%
– Itau (NYSE: ITUB): -20%
– Cemig: +26%