Friday, February 4, 2011

Gafisa (GFA) - Ouch

It is amazing what a rising rate environment does for interest rate sensitive stocks.  Brazilian homebuilder Gafisa (GFA) is being pummeled.   We are now back to July 2010 lows (nice round trip), after a drop of 33% from peak ($18 to $12).  Once again, Sam Zell is smart money - when he is selling, run for the hills [Oct 4, 2010: Selling some Gafisa Along with Sam Zell]  He almost top ticked this name.

If this level does not hold for GFA, those May lows come into play below $10.  Very compelling from the long side for a long term position here, but near term just ugly. 

Not much different how the entire Indian market is being crushed under a wave of interest rate hikes to combat Bernanke's global inflation plague (not that he is responsible mind you).

Since Bernanke won't be raising rates in the U.S. until 2034 not much of an issue for state side investors.  Ahem.

[Oct 21, 2009: IBD - Gafisa: What Housing Slump? Homebuilders Ride Brazilian's Resilient Economy]
[Sep 18, 2009: Brazil's Lula Has Good Chance to Build 1M Low Income Homes by 2011]
[Sep 15, 2009: Gafisa Denies Any Plans to Issue Shares in 2009, but Interested in Debt Offerings]
[Sep 2, 2009: Gafisa Downgraded on Potential Share Offering]
[Mar 30, 2009: Restarting Gafisa as Sam Zell Increases Stake]
[Oct 22, 2008: Sam Zell Increases Stake to Gafisa to 18.7%]
[Nov 19, 2007: Initiated a Position in Gafisa - Brazilian Homebuilder]

No position

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