CIG Stock Chart by YCharts

Revenues estimates sounds overestimated, even considering the continued appreciation of the Brazilian real in the last weeks. However, I do not see it as major problem for the stock as it remains undervalued and the Brazilian economy is already posting some recovery signs. We expect electricity demand in Brazil to keep on track in the short-to-medium term, Cemig is a great stock to gain some exposure to Brazil without exposure to extremelly volatile commodities.

I believe consensus EPS on CIG is underestimate, thus there is a huge potential for positive surprises in the very short-term. The apprectiation of the Brazilian real in recent weeks will reduce financial expenses in the second quarter 2009 and tariff correction will increase results during the second half of 2009. For 2010 tariff correction for sure will not be high, or it will be non-existant, however I believe demand for electricity in Brazil will recover fast in the second half of 2009 and 2010.