Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

Can Investors Salvage Value From Homex?

About six months, I wrote that I saw little hope that severely troubled Mexican homebuilder Homex (NYSE:HXM) would be able to pull itself out of a tailspin and salvage meaningful value. Since then, the shares are down about a third, the company has effectively ceased new operations, and bondholders and shareholders alike are wondering when and how the company will be able to restructure its debts and resume operations.

At the time of the company's last report, Homex had about $1 per share in book value remaining on the balance sheet. If Homex goes through a prepackaged bankruptcy similar to the one recently filed by fellow Mexican homemaker Corporacion Geo, equity holders may end up with about...

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