The company issued a statement that the price cuts will have a negligable impact on earnings. In essence, cuts in prices they can charge on energy they generate will be offset by the cost savings generated by price cuts to electricity that they are obliged to purchase to meet consumer demand.
This is a great buying opportunity IMO, especially given the heavy oversold technical indicators...
Can't post the link, thanks to the yahoo overseers... If you google copel and infomoney, it will come up though...
Aco, good to see you're still on the job. I'm wanting to get back in to GFA and was waiting for one more pullback. Might have waited too long. Price still looks pretty good, though not compelling. Did they actually unload alphaville? or is it "pending"?
Technically speaking, GFA is in strong shape if it can hold support at 4.18. Here's the official press release on Alphaville:
"GAFISA S.A. (Bovespa, GFSA3; NYSE, GFA) (“Gafisa” or “Company”) hereby informs its shareholders and the market that has initiated an analysis of strategic options for the “Alphaville” business, currently explored through its controlled company Alphaville Urbanismo S.A. (“Alphaville”), driven by the purpose of maximizing value to the shareholder of Gafisa.. Gafisa believes that the value of Alphaville, crystalized by the valuation of Alphaville, as set forth in the agreements in force, is not reflected in the current valuation of Gafisa by the market.
Alphaville has experienced significant growth due to its unique business model and its highly recognized brand. Between 2007, the first year Alphaville was under Gafisa’s control and management, and 2011 launches increased from R$ 237 million to R$ 972 million, while the average return on equity (“ROE”) for the period was 46% per year.
The process to capture value for Gafisa may include an IPO of Alphaville, the sale of a stake in the business or even the maintenance of its current status. The goal of exploring strategic options is to generate the highest potential value for Gafisa’s shareholder in the long run."