I have been keeping an eye on one stock for awhile now, and despite what may or may not happen in Brazil, there is one thing for certain: with millions of consumers scrounging for credit in a tight credit market, many will turn to credit cards, and that is where Cielo comes in. Cielo, being the biggest credit card issuer in South America, will no doubt reap the benefits of an increase in card purchases. But in addition to being a credit card issuer, it is also one of the largest payment gateway in the region. While the short term fundamentals are a tad questionable (with emerging markets surging beyond any recognizable P/E ratio a rational investor would consider justified), the longer term fundamentals scream buy. Perhaps a slight slump in stock prices would be in the cards, but with organic growth in South America (regardless of economy, although that play a part in the overall rate of growth), in addition to the idea of being bought out by a major credit card company, and I see tremendous upside for Cielo. The very idea of having a developed infrastructure in one of the top growth markets in the world would make credit card companies drool with envy. But even if they don't pull that off, perhaps they could make inroads into US and European markets with some acquisitions. OTC Ticker: CIOXY.
(PS: I am not a financial adviser, and suggest running all my ideas by a professional investment adviser. In addition, I currently do hold any positions in Cielo at the moment of writing).
Addendum: Since the stock split I have become bearish on CIOXY. I still love the business model, but I am going to put off buying it.
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