BTG Pactual September Small-Cap Portfolio: Cosan and Panvel In, Copasa and Pague Menos Out

The Quick Take

• BTG Pactual released its September small-cap portfolio with 10 stock picks offering upside potential of up to 65%, with two new additions: Cosan (CSAN3) and Panvel (PNVL3).
• Copasa (CSMG3) and Pague Menos (PGMN3) were removed from the September portfolio, with the remaining eight names retained.
• BTG's strategy notes that while long-term rates and equities have already priced significant fiscal risk, the Brazilian real (BRL) has not, creating a selective opportunity.

BTG Pactual published its September 2026 small-cap investment portfolio, introducing Cosan (CSAN3) — the Brazilian energy, logistics, and agribusiness conglomerate — and Panvel (PNVL3), a pharmacy chain, while removing water utility Copasa (CSMG3) and pharmacy retailer Pague Menos (PGMN3) from the prior month's selection. The broader September portfolio retains a bullish stance on Brazilian domestic-facing businesses, reflecting BTG's view that long-duration bonds and equities have substantially repriced fiscal risk while the real remains undervalued relative to fundamentals — creating a potential mean-reversion trade in BRL-sensitive assets.

The portfolio additions reveal BTG's sector conviction: Cosan's diversified exposure across Raizen (fuel distribution), Comgas (gas distribution), Rumo (rail logistics), and agricultural inputs makes it a diversified bet on Brazilian infrastructure and energy without single-sector concentration risk. Panvel's inclusion as a pharmacy chain signals BTG's confidence in Brazilian consumer healthcare spending resilience even amid elevated interest rates. The removal of Copasa and Pague Menos suggests BTG views their specific risk/reward less favorably — utility valuations face regulatory headwinds, while pharmacy retail faces margin pressure from competition and generic drug pricing.

The key forward signal is whether the Brazilian real begins to appreciate toward BTG's implied fair value — if the BRL strengthens, the small-cap portfolio's domestic-facing companies benefit disproportionately from reduced imported cost inflation. Investors should watch Brazil's September fiscal data and any government announcements on spending discipline, which are the primary drivers of market confidence in BRL stability. The macro variable is the Selic interest rate: Brazil's central bank cutting rates from their current elevated levels would serve as a significant multiple-expansion catalyst for domestic small-caps with high financial leverage.

Synthesized from 2 sources.