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Gafisa S.A. Message Board

  • styro90 styro90 Dec 7, 2012 9:05 PM Flag

    Still time?

    Aco, glad to see you're on the job (and making money). I always appreciate your researched posts. I've been busy losing money on AAPL. Rearranging strategies, etc. Soooo, Ive got some powder and considering GFA again. Iwas gonna wait for a correction but have already missed a healthy pop. Is this immune from USA idiocy?, or is
    Brazillian momentum (and other specific forces) beginning a move with some foundation under it? Sounds like fundamentals are favorable.

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    • Rebought my 15% stake at $4.47

    • Good entry right here IMO.

    • Hey Styro,

      Good to see you posting again and thanks for the kind words.

      Brazil is definitely impacted by the fiscal cliff and most other issues impacting the US - which is discussed everyday in the press - primarily because of the anticipated impact on exports and the negative impact on the currency. Having said that, Brazilian issues obviously still play a primary role. The government is responding to horrendous GDP numbers by injecting a heavy dose of stimulus to the civilian construction sector, because it needs a means to offset the negative impact of free falling exports. There is a lot of discussion regarding the future of the BRICs in academia now. Many are obviously skeptical about the sustainability of the current situation, and rightly so.

      Fundamentals for GFA are substantially better right now because of the management shakeup and renewed focus on cutting back on production (generating income through cost reductions vs revenue growth). Having said that, the company is still shouldering a very high debt that they need to reduce ASAP. The housing stimulus also helps, but IMO won't save the housing market from further declines any more than it did in the US. The problem ultimately boils down to affordability and consumer debt levels, which are both too high.

      Technically, things are still looking very good, but its always riskier to take higher priced entries. I don't want to advise you what to do, but I am anticipating a correction to the $4.45 - $4.55 range (top of the bollinger band) before the next move up.

      Good luck and keep us posted.


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