Assai / Sendas Distribuidora (Ticker: ASAI) - Single Stock Deep Dive

Our top-down tools keep flagging Brazilian equities as offering great risk-reward. To compliment our framework, we have sought out local bottom-up expertise to find individual names that could be of interest for equity clients. This is a guest contribution by Patrick Flood of LATAM Stocks on Assai (NYSE: ASAI).

• Assai (NYSE: ASAI) is the 2nd largest retailer in Brazil and the 24th largest company overall.
• Operates a Cash & Carry wholesale business model (“Costco of Brazil”). Cash & Carry format continues to grow in Brazil with room for further growth.
• Casino Group, the company’s former controlling shareholder, fully divested their 40% position in 2023, causing uncertainty and a large drop in the stock price.
• History of aggressive expansion financed by debt. 292 stores total, 28 opened in the last 12 months. Highly leveraged, largest risks for equity investors stem from their large debt burden.
• Stock currently trades around it's all time low price, potentially a bottom. This sets up a clearly defined trade parameter with potential attractive risk/return on the long side. Several Variant Perception Indicators support this view.

We have NO financial affiliation with LATAM Stocks or Patrick Flood. Our only incentive here is to try and add value for our clients.