Pena Nieto just includes it in the fiscal reform. Will Mexicans continue to invest? Or will there be a sell-off before the end of the year in stocks with gains in order to avoid the tax before it takes effect in January.
Its a Mexican housing company, its been sued by most of the banks as it has stopped paying interests.
Barclays earing report says:
2Q13 Results: Cash burn continues as operations come to a virtual halt
HOMEX reported 2Q13 results well below our forecast. Cash burn from its housing division (adjusted for the favorable FX effect) came in at negative P$4.4 bn in 2Q13 (P$7.5 bn in 1H13), as operations came to a virtual halt. The company titled 710 homes in the quarter, generating P$298 mn in revenues, or 27% of total revenues, which reached P$1.1 bn, decreasing 84% YoY. The infrastructure division contributed the balance of the revenues. For 1H13 Homex posted a consolidated P$3.3bn cash burn offsetting the P$4.2 bn cash inflow from the sale of the penitentiaries project.
The Company recognized a charge of P$5.3 bn, writing down land and construction in-progress inventory that do not qualify for the recently published rules for subsidy application from the government. Moreover, the company created a P$2.1 bn provision for uncollectable accounts receivable from clients that lost their eligibility for subsidies or deteriorated their credit status. Lastly, the company recorded a Ps.1.2 billion loss related to the cancellation of currency hedges.
Adjusted EBITDA for 2Q13 was negative Ps10.1 bn, from a positive P$1.7 bn in 2Q12. EPS for 2Q13 decreased to negative P$30.3 as compared to P$1.7 reported for the 2Q12. Finally, as of June 2013, the company posted a YoY decline of 96% in its cash position, which now reached a level of P$147mn.
We reiterate our Underweight rating on Homex, as the lack of operational and financial visibility, coupled with a continued high level of cash burn, prevent us from becoming more constructive on its shares.
Living in Mexico and reading what is being said about them in the newspaper I would not touch it as it may be suspended from the stock exchange like URBI and GEO were last week as they are facing BK. That's my 2 cents.
Steel is a cyclical business, now its the down part of the cycle. In this business you buy at below replacement value and you reap the benefits in the top part of the cycle. It will take a few year to pan out but it will eventually look like a great deal. Look at ticker SIM, that's the strategy they have followed in the past 15 years to be one of the biggest steel makers in Mexico.
Thanks for your comments. Hopefully the tide will turn but AXP and Ebay's results don't bode well for the market. I think May came in April this year.
Originally Modelo wanted to buy Bud's 50% ownership in the company and even tried to invalidate the InBev purchase of Bud. After years of negotiating and trying to continue as a stand alone company they relented to InBev's managment. Maybe with this development Modelo will end up buying the back from InBev that 50% now that they have agreed to the price it is worth. They could lever their ownership and make Modelo's stockholders very rich in the process.
Anybody care to comment on my insight.
I averaged down but not at 24.14 I had cold feet and waited till 25.10 But I still think its a great investment and next time I will follow your advice and be a little more opportunistic. Thanks again.
Sentiment: Strong Buy
Thanks for the comments and ideas, I will follow your advice and start averaging down tomorrow.
Sentiment: Strong Buy
With the steep decline in the past few days due to the fiscal cliff (which I don't think Congress or the President are stupid enough not to reach an agreement) even though I know taxes will increase is it worthwhile to increase my position and take advantage of the higher yield? Any ideas or comments?
Comex is a monopoly in Mexico it comands 65% of the paint market. They had only 6% of the market before. It will be a huge business for the specially with all the infrastrucure plans the new president has.
Sentiment: Strong Buy
I think it could even increase to 85 cents, although with the recent decrease in stock price people must be thinking it should decrease. I have been activelly increasing my position in the last two weeks. Lets hope for the best.
Just looked up the Spain and New Zeland Apple stores and both have delivery times of 3-4 weeks. Guess they must be selling every phone the can make for the next few monts.