Itaú recommends ‘shorting’ Vale (VALE3) for the next month; see why

O Itaú BBA updated its pair trade stock suggestion, with the addition of a new pair: long in Gerdau (GGBR4) and short in OK (VALE3).

Analysts see a less favorable moment in the short term for the OKsince the China should deliver weaker economic growth, “in addition to seeing lower cash generation potential when compared to recent quarters”.

already the Gerdau is the preferred stock in the mining and steel industry, given the expectation that the company should continue to deliver the best results in the segment until the end of the year.

“Although we project lower prices for 2023 in both the local and US markets, we still see strong cash generation of 15% for the year, enabling the company to continue to pay dividends and/or announce share buyback programs ”, he puts.

We remind you that this type of analysis aims to suggest securities that act as a matched operation, looking at a time horizon of between one and two months.

A matched operation consists of keeping a short (short) position in one stock and a long (long) position in another in order to obtain a financial gain from the operation when it is liquidated.

“We emphasize that the terms “long and short” do not mean to be a buy or sell recommendation, but rather that our expectation is that the stock on the “long” end will perform better than the stock on the “long” end. “shorts,” he says.

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