Stock market has worst week since 2020, and quantitative value strategy now points to Asas, Cogna and Usiminas as the cheapest
After an 18% drop in the Ibovespa in the week of Lula's re-election, manager Clube do Valor says to buy discounted shares, but warns of the risks of each one.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM CLUBE DO VALOR · 3 MIN
Ibovespa closed the week following President Lula's re-election with a drop of 18%, the worst since March 2020, and B3 companies lost almost R$1 trillion in market value in five trading sessions. According to manager Ramiro Gomes Ferreira, from Clube do Valor, the collapse reorganized the house's quantitative ranking of cheap shares and led the manager to buy shares such as Asas (AZZA3), Cogna (COGN3) and Usiminas (USIM5).
On Monday, the 26th, the index opened sharply lower and ended the day with a decline of 14%, the biggest daily drop since March 2020, according to the presenter. The small cap index fell more than 20%. There was a circuit breaker around 10am. That day, the manager bought almost R$5 million in shares, according to Ferreira, who attributed the decision to a rebalancing rule defined before the crisis.
How the ranking works
Clube do Valor, which claims to manage around R$7 billion, maintains a quantitative strategy that excludes securities with low liquidity, in judicial recovery, in a public offering for delisting or with recent losses. The remainder is ordered by three criteria: operating profit, cash generation and discount in relation to equity. The portfolio brings together the 30 cheapest shares.
As the ranking only looks at prices and balance sheets, a strong drop without new balance sheet makes the stock cheaper and moves it up the queue. Ferreira stressed that mentioning three names serves to explain the method and that concentrating the portfolio in a few securities would, in his words, be insane. The presenter also recalled that a cheap company is a riskier company.
Three stories, three risks
Asas, a merger of Arezzo and Grupo Soma, is in fifth place. It fell 43% in the week of the election and 72% since its debut, in August 2024, at R$50. According to the channel, the fight between founders led to the separation: Alexandre Birman stays with Arezzo and Hering, and Roberto Jatahy with Soma. Recurring profit for the second quarter fell 62%, to R$106.5 million. The stock trades at 0.36 times equity. BTG recommends purchase, with a target of R$40, while UBS downgraded the stock to neutral, with a target of R$25.
Cogna, in third place, fell 49% in the week and is worth R$3.2 billion, against R$13 billion in equity. For Ferreira, the price-to-earnings ratio of four times looks at past results, and the next one could be worse. There is divergence between banks: BTG maintains purchase with a target of R$4, while Citi recommends selling, with a target of R$1.20. The presenter also cited the pressure of the new distance learning framework.
Usiminas, second in the ranking, is worth R$6.3 billion, has R$6.7 billion in cash and trades at 0.31 times equity. Profit for the third quarter was R$243 million, below the R$280 million expected, and steel imports are putting pressure on the sector, with 600 thousand tons in September, an increase of 34% in one year. Ternium should increase its participation in the control block, depending on Cade's approval.
What does this mean for the investor
Ferreira said he doesn't know if any of the three actions will work and defended diversification. He cited a 1985 study in the Journal of Finance, which found that the stocks that fell the most outperformed the market by about 19% over the next three years, with the bulk of the effect in the second and third years. In the backtest from 2004 to 2025, the strategy returned 17.7% per year, against 9.4% for Ibovespa, with greater risk. Past profitability does not guarantee future results, and the analysis reflects the channel's vision, without constituting an investment recommendation.
Automatically translated from Portuguese.
