Abdalla Al-ayrot
Long only, deep value, special situations

Gafisa S.A.: Real Turnaround With Near-Term Catalysts And Longer-Term Value

Investment summary

Gafisa S.A (NYSE:GFA) is currently trading at a huge discount to its tangible value and intrinsic value. This is confirmed by the divestment of 70% of the company's subsidiary, Alphaville, is grossing the company more than half its current market cap. The buying parties are currently in the Due Diligence process. The company expects the deal to go through in late 2013.

The company's two other SBUs: Gafisa and Tenda, have undergone turnarounds, which have already shown clear signs of progress. The financial performance of the two segments has been suffering since 2011, due to an unprofitable expansion in both segments.

The Gafisa segment has decreased its exposure to low-margin non-core markets from 20% of its...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details