Gafisa's Quick 20% Return in Two Weeks

Gafisa (GFA) made a pitstop about 2 weeks ago; it was a nice opportunity to add shares, and I wish more companies would have some news item that let us jump in on pullbacks - that is more our style. [Sep 2, 2009: Gafisa Downgraded on Potential Share Offering] While thankful for the opportunity to get part of our position back near $26, we obviously did not buy enough, as the stock has made a U turn and surged nearly back to recent highs; that's a quick 20% return in under 2 weeks.


Gafisa says the return to relative health of credit markets will allow it to raise money via debt offerings; while a share offering might come in the future - it won't happen in 2009.

Via Bloomberg:

• Gafisa SA, Brazil’s second-largest homebuilder, may sell bonds in the domestic market this year, taking advantage of record low interest rates to repay maturing debt, said Chief Financial Officer Duilio Calciolari. “Because liquidity is increasing, we’re seeing more options for the company, like issuing additional bonds,” Calciolari said in an interview in New York. “It’s a matter of opportunity. Now that we have lower costs, we can refinance our short-term debt.”
• The Sao Paulo-based company sold 250 million reais ($137 million) of 2-year floating-rate notes in the local market last month, according to Bloomberg data. Gafisa will have 509 million reais in maturing debt by June 2010, according to company documents.
• The homebuilder has no plans to sell shares this year, he said. Gafisa’s rivals Rossi Residencial SA and PDG Realty SA Empreendimentos e Participacoes have announced share sales this year, heightening speculation Gafisa would follow. “There’s a chance we’ll sell shares in the future but not this year,” Calciolari said.
• The company’s revenue from low-income housing may increase to as much as 60 percent next year from the current 50 percent, he said.
• Sales may grow 15 percent this year and 25 percent in 2010, according to Calciolari. “There’s a huge demand for housing, especially for the low-income sector.”
• Prices for high-end homes have recovered to pre-crisis levels, he said.

[Aug 3, 2009: Gafisa Earnings Weaker than Expected, Does not Matter]

[Mar 30, 2009: Restarting Gafisa as Sam Zell Increases Stake]

[Oct 22, 2008: Sam Zell Increases Stake to Gafisa to 18.7%]

[Aug 17, 2008: Gafisa Earnings]

[Nov 19, 2007: Initiated a Position in Gafisa - Brazilian Homebuilder]

Long Gafisa in fund; no personal position

Comments

[Joshua Hayes:]

TraderMark,

I just want to say congrats. I have been in this game a long time (though I am only 30--started young) and usually I am VERY HARD to impress. My friend I must say I am very happy to tell you that you are an awesome read. I enjoy all of your articles and if I did not run my own money I would definitely have the confidence to invest with you. You are a class act. You give your selections in real-time and you are easy to track (unlike Cramer but what professional actually follows him?? I think no one who does this for a living, unless you are an intraday trader).

You have been writing for only a short time on SA (I think the end of summer 2007) but the volume and quality you put out is BEYOND impressive. I know some people think I am sucking up but, trust me, I don't have to do that and this is not my MO (you might be the first trader I have said this to publicly and that says something after doing this for 13 yrs). I may run a paid site but I still recommend that others read you. I also tell them that if they don't want to run their own money you would make an excellent option when you are up and running. Bottom line: I am very hard to impressive after almost 13 years of doing this as a hobby and also 10 years for a living.

Keep the post coming and keep doing what you do. You are a wonderful read in a market where there are few truly talented REAL traders that actually HOLD positions and can write. Keep up the great work buddy! I'll be reading till I die and if you go to a paid site I would sign up. Only GaryBSmith and RevShark have taken my money. You would be the third.

Nice job on GFA but don't be afraid to buy those breakouts when the trend is up on volume. :) Aloha from Maui and I wish you continued success in your amazing writing/trading. I am sure you already know, but you are doing an amazing job.

In such a short time so many people know you and I think it is great! Once again, aloha from Maui!

Sep 16 05:26 AM

[TraderMark:]

Thanks for the nice comments. Also been a long time reader of RevShark

Sep 16 10:09 AM

[Joshua Hayes:]

You are very welcome, Mark.

Sep 16 03:10 PM