Queen Elisabeth 2 in US

so apparently we are going ahead with QE2...

markets have been talking about a second round of stimulus for quite a while, and yesterday's FED minutes show us that US markets is strongly dependable on some kind of external revigoration in order not to fall in recession again...

american markets has been recovering (slowly, although the comparable base is very week). What worries me about QE2 is that it looks a short sighted way to boost economy...my point is that I believe people in US should think of some other ways of boosting the economy which will be sustainable in the long run...QE2 could have the same effect as cash for clunkers...strong support when measures are in place and then back to normal when finished.

Everyone knows QE2 can't run forever and ever and it shouldn't be the responsible for boosting economies...quantitative easing should be used as a last resort when everything else has failed...did the FED and US Gov already try all other possibilities? What worries me is that these things can't happen frequently and having William B. 'English' as Federal Reserve secretary, the last thing we want is to have a recession spreading worldwide again.

keep walking - introducing the new subject

it's been a while...

anyway...I've got a change of plans...
was thinking in talking about Karsten (CTKA4 BZ) but found it too tricky due to (kind of) lack of information as well as its low liquidity doesn't sound too atractive...

I prefer to focus my efforts on a company that I've been following for the last 3-4 years and delivered a stellar performance...  2005-2010 -> aprox. +4,000.00%!! From 2008-2010 -> aprox. 1700% and 2010YTD -> aprox. 200%!! really amazing rally...

the company is Cia Hering (HGTX3 BZ) and this fenomenal rally is backed by strong financials and growth.

to start off and quoting their website, is important to know a few things:

Cia. Hering is one of the largest retail apparel designers and manufacturers in Brazil. Operating in the retail industry for over 128 years, Cia. Hering currently develops apparel collections under three proprietary brands: “Hering,” “PUC” and “dzarm.”.

The “Hering” brand is the primary and most profitable brand.

The “PUC” brand is recognized as a premium brand of children’s’ apparel for special occasions and is the fourth largest brand in the upper income class, in terms of gross sales.

The “dzarm.” brand, meanwhile, is a jeanswear brand targeted at the teen market, especially young women.



retail structure

The retail structure includes two complementary sales channels:

(i) Hering and PUC stores, comprised of owned and franchised stores, and
(ii) multibrand retail stores.

On June 30, 2008, the company owned 195 Hering Stores and 47 PUC stores, of which 80% are located in malls in 22 Brazilian states, while the multi-label retail sector has 13,345 points of sale, which increases the reach of the distribution throughout the country. Hering also owns 22 franchised stores in several countries in Latin America and the Middle East.


I believe that was enough to understand where are we going to be focusing...next steps will be talking a bit more about the company itself and how it is playing its part in Brazilian retail business as well as "surfing" the clean wave in Latam economy for the last 5-10 years...

I will also bring to the table some data from my model and hopefully we will be able to value the company and conclude if at current levels (around R$ 80.00 / share) the company is still a good buy...



p.s. just to illustrate, in Brazil we always say that a basic day-to-day look is "a pair of jeans and a white hering" being the "white hering" a regular plain white t-shirt ;)