João Carlos dos Santos BTG Pactual First-place appearances: 3
Total appearances: 3
Team debut: 2012 BTG Pactual’s João Carlos dos Santos dominates this lineup and the Health Care roster for a third consecutive year. From his base in São Paulo, the 34-year-old researcher covers five Brazilian education stocks and is bullish on the sector. “Despite a 57 percent average share price gain in 2013,” he advises, “strong intakes in the first half of this year drive greater operating leverage for listed postsecondary players in 2014 and boost growth prospects for the next three years.” At its current pace, the increase in student numbers could propel the compound annual growth rate of three-year students to high single digits, he adds. Moreover, the analyst believes, “a friendly competitive environment, due to a superior value proposition and government-subsidized student financing program incentives for consolidation, could result in price adjustments that at least keep pace with inflation — with potential upside — further supporting margin gains.” Santos issues a word of caution, however. “Assuring a positive return on investment per student is likely to be key to avoiding regulatory thunderstorms. While we believe the larger groups are performing well, this is still an uncertain calculation, given the lack of reliable data.” A favorite name — “for those who can handle lower liquidity,” he says — is Pernambuco’s SER Educacional, which offers higher education courses to more than 100,000 students across 20-plus campuses in Brazil. Santos believes that a solid 16 percent increase in students in the first quarter and potential upsides from the integration of Pará’s Universidade da Amazônia, which SER recently announced it would acquire, should support strong performance in the second half. At the end of July, the shares were trading at 24.30 reais, and he projects a rise to at least 25.50 reais.
