China's Hard Landing

In this 5 series on Bloomberg,  A. Gary Shilling, author of The Age of Deleveraging: Investment Strategies for a Decade of Slow Growth and Deflation, states that China is headed for a hard landing.

Part1 - Part2 - Part3 - Part4 - Part5

BICB4 - Bicbanco

I've made a simple analysis in BICB4 figures:

• Margin from financial operations income dropped (up only 36% when portfolio soared 45%);
• Financial operations expenses for deposits, money market, borrowings and others grew 53%. What worries me is that allowance for loan losses grew only 7%, even with a stunning increase in loan portfolio;
• This resulted in an increase of gross profit from financial operations of just 20%;
• On the other hand, personnel expenses, administrative expenses an others grew only 7% (1);
• Finally, operating result increased 33%.

- Dividend yield (3 years): 6.0%
- Mean P/E last 3 years: 8.0

Has the time come to start a buying?

(1) BICB had extraordinary income in 2009 related to PIS Law 2.445 e 2.449/88 and  Amnesty Law 11.941/09 of about 90 million. I'm expurgating that from 2009 operating results.

USIM5 - Usiminas

What about Usiminas? It has dropped 42% in the last 12 months and is now close to the minimum reached in 2008 crisis. Even through  a bad moment, yield is 4.4% and P/E 11. If we consider historical numbers for earnings of 2.5 billions and dividends of 1 billion, P/E would go to 5.5 and yield to 7.5%.
I prefer USIM to GGBR because its debt is lower and USIM plan to invest in ore mining, so its business could become full integrated, as CSNA is.
What do you think about?

CARD3 - CSU Card System

According to Google Finance, the ratio FCF / Market Value today is 38,36 / 208 = 18,44% (year 2010 Cash Flow Statement)

CSU announded today the repurchase of 2,8% of it's stocks in the market.

I'm thinking about buying some more stocks. It's one of the smallest positions in my portifolio and the company has shown a good cash generation capacity.

I'm also waiting to buy FJTA4 for 3,10.

FRAS4: Price / Book Value today = 1,01

Today in Infomoney: "Gestor traça forte cenário para Randon, mas vê questão da Fras-Le com incerteza.

A questão Fras-Le
Apesar de seu otimismo com a Randon, Salaverry reconheceu que a Fras-Le (FRAS4) ainda é uma questão não resolvida na empresa. A Fras-Le, segundo ele, “caiu no colo” da Randon na década de 1990 por dificuldades financeiras, e tem uma estrutura de negócios – e perfil de crescimento – diferente do restante da companhia.

Para o gestor, há dificuldades em visualizar qual será o futuro da Fras-Le. “Seria mais interessante fechar o capital dessa empresa, mas ela não se posiciona, e não parece inclinada a comprar participação de outros acionistas na empresa, então não vemos isso como mais provável”, explica.

Bovespa Laggers

Since Bovespa starts to show an interesting decline, I searched companies that have dropped more than 20%. After that, I've made some adjustments, like:

• P/E less than 15;
• Yield more than 3%;
• Excluded some companies that don't worth a penny.

The results are not yet so encouraging.

ROMI3 - Romi

Just so you know: I bought some shares of ROMI3 today. It has gone down too much.
I think I'm fully acquainted of its problems (weaken dollar, raw material price level, China). But if it was not for that, how could you buy at that price?
I think it worth a small position at this price.