🤖📈 Top Trade Ideas for July 17

Cosan, a Brazilian holding company, is seen as a strong buy opportunity due to its attractive valuation multiples, potential macroeconomic tailwinds, plans for subsidiary listings, and ability to reduce debt. The company's business diversification and steady cash flows provide a solid foundation for managing leverage. Cosan's portfolio consists of major companies in agribusiness, natural gas, lubricants, logistics, and mining. The company is expected to benefit from the global energy transition and increasing demand for renewable energy sources. Despite its high leverage level, Cosan's debt is manageable, and the reduction of debt is seen as the main value-unlocking trigger for its shares. The company's exposure to commodity cycles, particularly through its stake in Vale, is a potential risk. However, the overall potential upside outweighs the risks, and Wall Street analysts have set an average price target of US$22.26 for Cosan, providing a +38% upside.

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The author is bullish on Vår Energi, a Norwegian oil and gas producer, as a top pick from a risk/reward perspective. They believe that Vår Energi and Kistos offer excellent investment opportunities in Europe, as oil and gas are trading below pre-war levels, presenting an opportunity to buy assets at low prices. Vår Energi has low production costs and low CO2 emissions compared to the rest of the world. The company has 2P reserves of around 1.1 billion BOE, with plans to grow production from 214k boe/d in Q1 2023 to 350k boe/d by 2025. Vår Energi has performed well in recent years and is expected to see increased shareholder returns, with dividend payments expected to be at least 1 billion € per year, resulting in a dividend yield of 15%. The company has three main projects that are expected to contribute to production growth, and its acquisition of Norwegian assets from Neptune Energy will increase production by 31% and reduce operating expenses. The author is bullish on the oil and gas market, citing high demand and the reopening of the Chinese economy. They disagree with hedge funds shorting oil and believe that historically, oil and commodities have performed well during times of crisis. While Vår Energi's cash flow from operations decreased in Q1 2023, the author sees no major problems due to high cash flow and dividends. Vår Energi is considered one of the cheapest energy stocks and is seen as undervalued. The author plans to increase their position in Vår Energi and believes that the company will perform well despite negative sentiment towards European oil and gas producers.

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Brighthouse Financial Inc (BHF) is currently trading at a low valuation with solid earnings estimates. Since its spinoff from MetLife in 2017, BHF has rapidly expanded and now has a total investment of $118 billion, with $85 billion in fixed maturity securities. The company has strong momentum and is coping well with macroeconomic headwinds, with stabilizing revenues. BHF maintains a strong liquid position with $1.1 billion in liquid assets and continues with share buybacks, indicating a long-term pick. BHF operates as a life insurance and annuity provider in the United States and has a solid investment portfolio, with a large portion in investment-graded securities. The company plans to introduce a new life insurance product to further diversify its offerings. BHF has outperformed the SPY over the last 12 months and is trading at a significantly lower multiple than the sector and its NAV price, suggesting major upside potential. Estimated earnings per share in 2023 could result in a price target of $85, a 77% upside potential. BHF has more cash than debt, putting them in a flexible position. While inflation has affected the policy retention rate, lower interest rates and a reduction in inflation are expected to be tailwinds for BHF, leading to a strong upswing in EPS. The strategic approach of BHF sets them up well for future success, and investing in BHF now is likely to yield a return that outperforms the broader markets.

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