Companhia Brasileira De Distribuição: Accessing Ecommerce In Brazil And Colombia
Written by Summary
GPA is continuing to expand into e-commerce, which will help it outpace stocks in other sectors.
GPA provides investors with exposure to retail in Brazil and Colombia (circa 85% of revenue).
2022-2023 is a good time to accumulate as emerging markets equities are likely to struggle during these years.
We Are/DigitalVision via Getty Images Opportunity Overview
Latin American companies that are branching out into e-commerce/ an omnichannel approach are more likely to outperform other emerging market equities in the long run. Many of these companies are currently attractively priced. However, some of these companies’ stock prices have been on a downtrend since 2020. Companhia Brasileira de Distribuição (NYSE: CBD ) (doing business as GPA), which is highly active in Brazil and Colombia, is currently attractively priced given its long-term growth prospects. I will continue accumulating during pullbacks that occur this year, as emerging markets increasingly come under pressure due to inflation, slower economic growth, and rising rates. I am extremely bullish on Colombia and Brazil in the long term, due to the strong commodity exposure, but both countries will likely experience setbacks in the short term, in line with other emerging markets. YCharts GPA has significantly underperformed the Global X MSCI Colombia ETF ( GXG ) and the iShares MSCI Brazil ETF ( EWZ ), which largely occurred due to GPA’s relatively stronger performance in 2020-2021. Companies like GPA that embraced increased digital initiatives were able to stand out during 2020. GPA is an interesting name to consider if you are looking at Brazil and Colombia, and want to consider retail stocks in lieu of the ETF. Latin American Consumers
Retail companies in Latin America are increasingly going digital to help boost their sales/market share, and COVID has accelerated this trend. Brazil has the largest […]
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