Why Ultrapar Is Poised to Outperform

Before you go, we thought you'd like these...
Before you go close icon

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Brazilian liquefied petroleum gas distributor Ultrapar Holdings has earned a respected four-star ranking.

With that in mind, let's take a closer look at Ultrapar, and see what CAPS investors are saying about the stock right now.

Ultrapar facts

  

Headquarters (founded)

Sao Paulo, Brazil (1937)

Market Cap

$14.0 billion

Industry

Oil and gas storage and transportation

Trailing-12-Month Revenue

$27.4 billion

Management

CEO Thilo Mannhardt

CFO Andre Covre

Return on Equity (average, past 3 years)

16.3%

Cash/Debt

$1.5 billion / $3.2 billion

Dividend Yield

2.7%

Competitors

Dow Chemical


Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 98% of the 1,834 members who have rated Ultrapar believe the stock will outperform the S&P 500 going forward.

Just yesterday, one of those Fools, djohn1969, succinctly summed up the Ultrapar bull case for our community:

[T]he company's products and services are so integral to the day-to-day lives of Brazilian citizens and the Brazilian government is focused on lifting Brazilian citizens out of extreme poverty and protecting them from pains such as inflation. In other words, the same nationalist issues that hurt [Petrobras, Vale, etc. seem to be actually helping UGP. ... Unlike VALE, Ultrapar is not dependent on China or the wild swings in sentiment regarding China. Unlike PBR (and Vale to a lesser degree), Ultrapar is not a victim of Brazil's political power brokering and corruption. And, unlike the Brazil utilities that had until recently been widely considered the "safe" Brazil plays, Ultrapar is not the target of the drastic mid-game regulatory rule changes that have hammered the Brazil utilities.

With that said, the stock has had quite a run so I probably wouldn't open a new position until after the next earnings release (I already have my full position). I also recommend a significant amount of due diligence to understand what the company does, where it operates (not just Brazil), etc. prior to buying since it is typically harder to understand and keep up with foreign companies.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, Ultrapar may not be your top choice.

We've found another energy play we are incredibly excited about -- excited enough to dub it "The Only Energy Stock You'll Ever Need." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

The article Why Ultrapar Is Poised to Outperform originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Petroleo Brasileiro S.A. (ADR). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners