Small caps: BTG includes stock that jumped 140% in 2022 in portfolio for February

BTG reiterated a positive view for Cielo, which had the highest increase on the Ibovespa in 2022 (Image: REUTERS/Amanda Perobelli)

THE BTG Pactual traded four stocks from its recommended portfolio of small caps in the February update. the papers of Mills (MILS3), Sinqia (SQIA3), ABC Brazil (ABCB4) and Mateus Group (GMAT3) were cut from the list, replacing We will (GO 3), SmartFit (SMFT3), Saint Martin (SMTO3) and sky (CIEL3).

About Cielo, the biggest increase in the Ibovespa in 2022, the bank’s analysis team reiterated a positive view after the company’s fourth quarter 2022 results were announced.

The machine company payments presented good quarterly results, according to BTG, with recurring net income of BRL 910 million in the second half of 2022.

“Annualizing this, we reached an annual result of R$ 1.8 billion in 2023. But the recently announced regulatory limit for interchange fees (which we see as positive for ‘purely acquirers‘ such as Cielo) supports our estimate that net income could reach R$ 2 billion in 2023, “says the institution.

Still, BTG looks more optimistically at the prospect of a market for credit harder ahead, which may support the company’s prepayment business and suggests “a positive asymmetry” for this year’s results.

BTG evaluates the valuation of Cielo as attractive, even after the jump of more than 100% in the last year. Along with the “solid” operating fundamentals and results, the stock is still a great option to have in the portfolio – at least in the short term, he defends.

For February, BTG kept shares of 3R Petroleum (RRRP3), Santos Brazil (STBP3), Desktop (DESK3), curry (CURY3), embraer (EMBR3) and Harbor (PSSA3).

Company ticker Weight
Harbor PSSA3 10%
We will GO 3 10%
sky CIEL3 10%
embraer EMBR3 10%
SmartFit SMFT3 10%
3R Petroleum RRRP3 10%
Saint Martin SMTO3 10%
Santos Brazil STBP3 10%
curry CURY3 10%
Desktop DESK3 10%

In January, BTG’s small cap portfolio advanced 9.3%, beating the 2.9% rise of the Small Cap Index (SMLL) and 3.4% of the Ibovespa.

Source: Moneytimes

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