Vulcabras - VULC3
The Brazilian leader in running shoes at less than 10x earnings
Call me repetitive, but I just cannot stop with Brazil.
The country has some impressive companies trading at what, in principle, seems like pretty undemanding valuations, at least on a screen basis, and many times, after a more demanding review as well.
Take, for example, Vulcabras, the company we are talking about today. It ranked fourth in my Brazilian consumer discretionary screen.
A company growing at 20%+, with 20%+ ROEs, and trading at basically 10x TTM earnings. It surely deserves a deeper review.
What I found was a company with a lot more quality than what could be inferred from its current valuation:
Leader in running sports in Brazil, potentially above all the foreign big names. Growing market share since the pandemic.
Significant space to expand in upper-range segments with higher margins.
Significant pricing gap against its foreign competitors to become the ‘value’ choice if the consumer gets hit in Brazil.
Conservative leverage.
A beneficial tax scheme.
On your marks, ready, go!
Disclaimer: The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. I may own or later purchase some of the stocks mentioned in this article.
I try to post as much free content as possible on Quipus, but the deeper research work has to remain behind a paywall so that it compensates me for the time I spend researching and writing.
If you would like to read Quipus’ most valuable content, you can make use of a temporary 20% discount on the subscription price, forever!
With the discount, Quipus is one of the cheapest publications on Substack, a true value bargain given what you get access to.
