The electronic retail sector still lives a good time. After a nice push in the first half, when mandatory confinement showed the population the wonders of shopping on-line, the first signs of a recovery in the economy are a new boost for sales.
This year’s Children’s Day gave a good indication of the vitality of the e-commerce. According to Ebit | Nielsen, digital sales for that date jumped 28% compared to 2019, reaching R $ 3.1 billion.
And the months remaining until the end of the year have everything to register another increase in the pace of business. After all, November is the time for Black Friday and, soon after, the country is already on a rhythm of Christmas shopping.
Principal player sector, the Magazine Luiza (MGLU3) just done one more stock split, from one to four, which facilitates the entry of more individual investors. It has many advantages in its favor, but due to the already stretched prices, there are houses that do not recommend buying the paper.
Technology, delivery of results and acquisitions are competitive advantages
Pedro Serra, manager of research from Ativa Investimentos, says that the market has a very positive view of Magazine Luiza because the company is well managed and has made massive investments in technology. “It has a very round logistical operation, which works well and is recognized by the consumer, which creates solidity,” he says.
Another competitive advantage is the purchase appetite of other e-retail companies, such as Netshoes, Virtual shelf e Hubsales. “All of this generates a lot of value, the wide margins are there. And she is still open to continue with the acquisitions, which can expand her market share, ”says Lucas Carvalho, an analyst at Toro Investimentos.
Carolina Ujikawa, head of equity research from Mauá Capital, says that the company’s appreciation is the result of its assertiveness and delivery capacity, with results that have been positively surprising the investor for at least four quarters.
“She trades at multiples higher than her peers. But it continues to grow, generating revenue with profitability. B2W, for example, grew for a long time without making a profit ”, he compares.
Via Varejo is a rival that should be considered
João Guilherme Penteado, CEO of Apollo Investimentos, also sees in the delivery of consistent results why Magazine Luiza is priced above peers. For that reason, he says the company is a case comfortable for more conservative investors.
“On the other hand, there are other players who are underpriced and may represent greater opportunities, but also with greater risk”, he ponders. “Via Varejo was poorly priced because of the previous management, but now it is being remodeled and this is being corrected.”
José Francisco Cataldo, research superintendent at Ágora Investimentos, says that Via Retail (VVAR3) today has a valuation more attractive than the rival. “But, in terms of results, everything will depend on the financial part”.
Toro Investimentos has a neutral recommendation for the role of the investment Luiza Trajano, even recognizing the success of its efficient and well-oiled digital operation.
“We see limited potential for price growth over the medium term. Despite being an excellent company, we do not understand that the share price is attractive ”, justifies analyst Lucas Carvalho.
He also recognizes the merits of Via Varejo, which made a strong immersion in the digital channel. “It is no coincidence that their prices have appreciated so much since the beginning of the pandemic here. In March, the paper cost R $ 3.50 and today it deals in the range of R $ 18 to R $ 20. ”
Ativa is another with a neutral recommendation for Magazine Luiza, which, according to the broker, has “very stretched” prices.
“Our purchase recommendation is for American stores, which we consider the best player of the sector. It is a very capitalized company, which is also investing heavily in technology, but with a level of valuation better than Magazine Luiza’s ”, says Pedro Serra, research the broker.
Ujikawa says that Mauá has been bought in Magazine Luiza since September 2017. She also likes Via Varejo, but she notes that the company’s history with the new management is still short and, therefore, the long-term investor tends to prefer the Magazine safe results.
“Both players they negotiate well with suppliers and have very good supply and logistics teams. Both have the capacity to increase their market share“, He concludes.