A Hidden Gem In The Solar Industry? [View article]
RSOL has serious liquidity issues. Please read the 10-Q. They are in dire need of financing by June 30. An investment here is a bet they will get the financing on good terms, which I think is unlikely. More likely is serious dilution. Of course, someone may just buy them out instead of giving them financing. Then obviously this stock will soar. However, it's purely a gamble. But, sometimes playing roulette does have huge payoffs.
From the 10Q, for the lazy folks "If we are unable to extend the maturity date of our revolving line of credit with Silicon Valley Bank or encounter unplanned operational difficulties, we currently will not have sufficient funds to repay our debt when it comes due on September 30, 2013 or to fund our operating cash needs for the next twelve months. These circumstances would require us to obtain financing from another source or raise additional capital through debt financing, equity financing or capital contributions from shareholders, if available to us."
"On May 10, 2013, we entered into a consent agreement with Silicon Value Bank to extend until June 30, 2013 the requirement that we obtain net proceeds of not less than $3.4 million from borrowings under a new subordinated debt agreement. In addition, until receipt of such proceeds, we agreed to deposit the $500,000 of unrestricted cash, which we are required to maintain under the terms of the SVB Loan, into a restricted account at the bank. We are presently exploring new financing alternatives that we believe will comply with this requirement, though there can be no assurance that we will be able to complete such a financing by June 30, 2013 in order to comply with the requirement."
Broadwind Energy Could Be Set For A 'Towering' 2014 [View article]
Great summary of the numbers. I think the final multiple depends on the outcome of the PTC extension as that would provide more clarity on the sustainability of the business post 2014. This is still somewhat far away, but a favorable PTC result, which I too believe is very likely, would mean that BWEN would warrant a much higher multiple than you are using. But, of course, nothing wrong with being conservative. Thanks again for summarizing the fundamentals here.
$30 million cap-ex is not maintenance cap-ex. Management has said that maintenance cap-ex is around $12 million to $15 million per year. You cannot include growth cap-ex in projections without an added assumption of revenue/EBITDA growth. If you are conservative and don't want to assume any growth, then you use maintenance cap-ex to achieve a "steady-state" annual free cash-flow number. As for Q1, you are right, it can't be annualized, but that's because the next few quarters will be even better than Q1, as they have not had the full benefit of cost-savings yet. As for the secular decline issue, that is correct to a degree, except that is why the multiple if so low. Plus, their end markets have bottomed and the company is moving into new markets which are not in secular decline. With $4.00 in base annual free cash-flow, I think a $20 price target is certainly reasonable. If the company can successfully begin to move into new markets, the multiple will expand. At the current price of 2X annual free cash-flow, I think the valuation is ridiculous and assumes the company will be out of business in a few years.
very nice summary, however I believe your free cash-flow estimates are certainly draconian, as you admit, and I think there is a slight calculation error. The idea with free cash-flow is to get a baseline for the business. XRM has quite a bit of growth cap-ex in your cap-ex figure and maintenance cap-ex is only around $12 million a year as per management. If you are not going to assume top-line growth into the numbers resulting in higher EBITDA, then I don't see why you would include growth cap-ex as an expense to cash-flow. Plus, you certainly do not need to include cash taxes for XRM (no acquirer would), because XRM's NOL's are I think around $175 million in the US and $155 million outside the US. I don't think it's that tricky to utilize these NOL's. I'm sure they have good lawyers and accountants. So they won't pay the types of taxes you assume for quite some time.
My own estimate has FCF per share at $3.00 to $4.00 ($125 million in EBITDA - $30 million in interest - $15 million cap-ex - $10 million pension = $70 million and I adjusted a bit downward to be somewhat conservative, and so I'm not accused of being completely out of my mind bullish on this stock). And my price target is $25 per share, assuming no growth. If XRM grows into new markets, as they are hoping to, I'd up the target to $50 in a few years assuming they'll get a higher multiple.
What I found most interesting in this article is that Zell was interested in buying Tenda at first! Fortunately, GFA didn't accept his offer. I bet Zell wants to buy Alphaville now to capitalize on the same opportunities he sees for Tenda. As I've mentioned in the past, Tenda, once the worst business for GFA, will, I believe, turn into a growth driver over the next few years.
You are correct that the CEO worked for the company for a long time, but that's not a big deal. Actually, I'm more interested in the CFO here, as GFA has been more of a financial turnaround than anything else. Note that the CFO was the former CEO of Alphaville.
Gafisa Rising - This Turnaround Looks Real [View article]
Thanks all for the continued dialogue.
With GFA, what everyone is missing and what the original article here laid out nicely is that Tenda is a potential growth vehicle in the future and we'll start seeing it later this year. Investors are focused on Alphaville, because Tenda had problems in the past. But, for the long-term (and even short-term into the Olympics), Tenda is a great business if managed properly and that's why I'm still in GFA. Management appears to agree with me given their guidance for new developments in Tenda next year. I suspect that once the Alphaville saga is over, they will plow more money into Tenda.
Everyone should remember that this is a new management team at GFA and they have been turning around the company for around a year and half now. They have done a great job and I believe they know what they are doing.
As for "Selling Winners and Buying Losers", if you believe in mean reversion (for which there is ample evidence in all aspects of life), all things equal and assuming your research is good, this is a perfectly good strategy in business and investing. Yesterday's poor performers nearly always turn into the high flyers of tomorrow, and vice versa. AAPL ten years ago was surely one of the great examples of all time for the sell winners (MSFT) and buy losers (http://bit.ly/pFSoX2) mean reversion concept. So if GFA management is thinking of selling Alphaville during the current good times and investing more in Tenda during the bad times, I believe they are making a very smart move. Shareholders will thank them in a few years when all the analysts on Wall Street write glowing reports about the growth potential of Tenda (at which point we can all smile and sell).
Gafisa Rising - This Turnaround Looks Real [View article]
Thanks for the summary. I think the issue with Gafisa is that it's taking longer than some investors expected to get thru the legacy housing that didn't work out. That's OK with me. I can wait till 2014 till everything is cleared out. Anyway, for me the highlight of the press release was ramping up of launches for Tenda. This signals to me that management believes there is large growth ahead for Tenda and I agree. Finally, there is still zero clarity as to Alphaville status. I think that is troubling investors. If they go thru with an IPO or spin-out that would be very positive for GFA shares. If instead they opt for an outright sale of Alphaville, as has been rumored, I'm not sure the stock price will react much.
Gafisa Rising - This Turnaround Looks Real [View article]
Forgot to mention, yes I agree with you, Tenda is sort of starting over again. But, they still have alot of intangible assets (e.g. government connections, distribution etc.), so it's not really like starting again. Plus with Gafisa's balance sheet very strong after the sale of Alphaville, Tenda will huge financial resources to expand.
Gafisa Rising - This Turnaround Looks Real [View article]
Great article today at Exame: http://bit.ly/14CMvG1 - about Gafisa. Type Gafisa in search box (busca) and the first article is: O que seria da Gafisa sem a Alphaville Urbanism (What will Gafisa be without Alphaville?). Just run the article thru Google Translate if you don't speak Portuguese. The article brings up all your points.
Basically, the market is very confused with the sale of Alphaville, but I trust management here and I do think selling is a good option for shareholders and furthermore they are somewhat forced to do this sale from what I can tell. I just wonder why they didn't opt for an IPO or spin-off. But, again I think this is because of some legal considerations shareholders do not know about. Gafisa has a current litigation going on with the former owners of Alphaville concerning the additional payments.
Anyway, I am very bullish on Tenda long-term and with the sale of Alphaville, Gafisa can recapitalize the balance sheet and plow more capital into Tenda. At least I hope that's the plan. Tenda may have performed very poorly in the past, but it has alot of potential, in my opinion, as 95% of Brazil is very poor (by even US standards), and they need better housing. So low-income housing is a strong secular trend in Brazil for next few decades. Just my thinking, after living in Brazil for some time and travelling there frequently. I am not at all bullish on high end real estate in Brazil and I am confused as to why Sam Zell is even interested in Alphaville here, except that I'm sure he has other plans or maybe hoping for a quick IPO flip. His name adds alot of weight to an IPO.
Gafisa Rising - This Turnaround Looks Real [View article]
"That's quite a statement, if it somehow explains why Gafisa could have lost 90% of its capitalization amidst a roaring bull market in real estate."
It's not quite a statement. It's a fact. GFA is not the only homebuilder in Brazil to have lost significant value, despite a roaring real estate market in Brazil. They have all gotten killed in the last 2 years. Please take a look at PDG Realty for example, the largest homebuilder in Brazil, or look at Rossi Residencial. It's interesting that the GFA articles on SA don't reference the comparables in Brazil. I'm not sure you can understand GFA without looking a the other publicly-traded real estate construction companies in Brazil. Even though only GFA has an ADR, the other companies do have English investor relations websites. The values were not lost because of a weak real estate market in Brazil. There are other factors at play here, which you can research by reading Brazilian economic journals. A good place to start is: http://www.valor.com.br - just search for Gafisa and use Google translate if you do not speak Portuguese.
And yes, if the real estate market in Brazil suddenly crashed (which is quite possible for high-end properties, NOT low-income housing ala Tenda and Minha Casa), businesses like Alphaville (not Tenda which has government support) will get destroyed. That's a fact. I'm not saying there will be a real estate crash in Brazil on the high end of the market. In fact, I think it's unlikely near-term before the Olympics, but many many intelligent people have been screaming bubble for years in the high end. And if you went to Brazil and spoke to regular people you would understand that the bubble is truly massive on the high end of the market and is not sustainable (per sq. ft. an apartment in Ipanema in Rio, in an area where I guarantee that you will never live, is more expensive than Manhattan real estate). So yes, selling Alphaville here is not at all like selling on the bottom. It's probably close to selling at the top actually. Things like Tenda, though, are at the bottom and the mess is cleaned out. So selling Alphaville and retaining Tenda is a good strategic move in management is thinking long-term. Nevertheless, they have to sell or IPO/spin-out Alphaville, because of existing liabilities,so it's not really a choice and the argument is moot.
Anyway, once again I think you are misunderstanding some key facts about Brazil and about Brazilian homebuilders, in general (e.g. comparing Caixa to Fannie Mae misconstrues some basic facts about how Brazilian finance and government controlled entities in Brazil function as opposed to the US). But if your conclusion is the same as mine, with regards to to Gafisa, namely that the stock is a good buy here, I guess it doesn't matter.
Gafisa Rising - This Turnaround Looks Real [View article]
Thanks for the very well-written article on GFA. I agree with some of your conclusions (I am also long GFA), even if I believe your reasons for your conclusions, reflect slight misunderstandings of how the economy/housing actually functions in Brazil. Nevertheless, it's good to see some analysis on the Tenda, which although problematic for GFA in the past, has great potential in the future.
In terms of your analogies to US home builders, this is one of the things that I think is quite misguided. It is difficult for most Americans to truly understand GFA and the other home builders in Brazil, without a deeper understanding of Brazil thru either traveling there or living there. The analogies to homebuilders in the US (and to Fannie Mae as it pertains to Caixa), and the US housing crisis, is misleading.
For example, you say: "It is for this reason that I am mystified by recent rumors it would sell such a profitable division (Alphaville). An IPO might be a possibility, but the wisdom of an outright sale at the bottom of the real estate market seems illogical to me."
This not a bottom of the real estate market in Brazil, because there hasn't been a top. The Brazilian real estate market has been booming for at least 7 years already. Prices have soared and are not correcting, as far as I can tell. There has no been no housing crisis or depression like in the US. The reason for the decline of homebuilder equities in Brazil is not due to any major housing decline in Brazil or any economic crisis. In fact, there is a disconnect between the housing boom in Brazil and the actual equity prices of the homebuilders. Understanding that disconnect is important to trying to understand the future direction in the prices of the Brazilian homebuilder equities.
With that background, it is easy to understand why management may consider selling Alphaville: 1. Alphaville targets a housing market in Brazil that is for the most part not subject to the Minha Casa program and unlike the low-income housing in Brazil, the segment that Alphaville targets is showing signs of a serious bubble. So, in fact, management would be selling at what seems to be a peak in the market, not a bottom, as you suggest. It's best to sell when things are good, and not when they are bad. 2. GFA has outstanding obligations relative to the Alphaville purchase that it must satisfy at some point. So even if Alphaville's business continues to be strong (something I think is doubtful, because of the bubble in high-end market in Brazil), GFA needs to find a way to satisfy these obligations. It's best to deal with this now, when the business is good, rather than deal with it at some later date. 3. By getting rid of Alphaville, either via IPO, spin-out, or sale, management can deleverage, and focus resources on other aspects of the business, that I think have much more potential longer-term. GFA does not need two divisions focusing on the higher end market.
That said, I agree that an IPO or spin-out of Alphaville would be better for shareholders. And the prospect of an outright sale, is one of the reasons, I believe for the recent poor performance of GFA. The other major reason for GFA's decline recently, has to do with hedge funds in the US worrying about interest rate increases in Brazil and therefore selling out of Brazilian stocks. Of course, this worry simply reflects a major misunderstanding of Brazil because as you mention raising interest rates will have little effect on the largest housing markets in Brazil (Caixa's rates for Minha Casa will be uneffected for all intents and purposes), and more importantly Brazil has long had the highest interest rates in the world, so it's doubtful any slight increase to previous rates will matter much.
Gafisa: Deeply Undervalued But Still A Speculative Investment [View article]
Nice article. ACO already addressed the debt profile issue somewhat, but I would add that you need to break down who the actual creditors are here to understand the debt profile and why it's not as risky as first supposed.
Additionally, you seem to have missed the most important part of the GFA story right now: Alphaville. How GFA ultimately resolve the Alphaville issues, either via a sale, IPO, spin-out etc. will be an important issue for GFA's stock price going forward.
Lastly, in terms of a bubble, I do not believe there is any evidence whatsoever for a bubble in Brazilian real estate on the low end of the market for the Minha Casa program. The bubble is primarily in properties which don't qualify for Minha Casa and at least from my travels, in Brazil is focused on key high-end areas in Rio (e.g. Ipanema and Leblon) and Sao Paulo, where there is alot of foreign buying. As long as GFA focuses development on the right projects, they will not be effected by any bubble.
Broadwind Energy: The Turnaround Is Underway [View article]
"Nevertheless, if the PTC is not extended after this year it will almost certainly put a drag on the tower business beginning in late 2014."
I do not believe this is necessarily a correct assumption. The recent extension of the PTC included an interesting provision whereby projects simply needs to be started by the end of 2013 to qualify for PTC. As such, I think what you will see is a big rush to get the so-called paperwork in to prove the project has started by the end of 2013, but the real business will get done over a multi-year time frame. Large wind projects take quite some time to get started and complete, particuarly at this point since the industry has been somewhat depressed for some time. Given this new provision of the PTC, I think it's a given that tower business will remain strong thru late 2015, irregardless of a new extension or not. Of course, if there is a new extension, that will be a big bonus, but I don't think it's vital to the investment case for BWEN. It's sort of icing on the cake, if it happens. Incidentally, I also think it will be extended because wind has bi-partisan support.
Broadwind Energy: The Turnaround Is Underway [View article]
I would also add to your continued excellent commentary, that the gross margins have been somewhat artificially depressed because of various restructuring charges and depreciation expenses. So although this is a low gross margin business, the gross margin as stated in the company's SEC filings is more of an accounting measure and not truly reflective of the real gross margin. EBITDA is a better metric here to follow.
That said, I also think that it's the direction of gross margins that's important when considering any investment, and not necessarily the absolute level of gross margins. It's best to invest prior to margin expansion. BWEN's gross margins will likely expand dramatically in the coming quarters for the reasons you mentioned.
A Hidden Gem In The Solar Industry? [View article]
From the 10Q, for the lazy folks
"If we are unable to extend the maturity date of our revolving line of credit with Silicon Valley Bank or encounter unplanned operational difficulties, we currently will not have sufficient funds to repay our debt when it comes due on September 30, 2013 or to fund our operating cash needs for the next twelve months. These circumstances would require us to obtain financing from another source or raise additional capital through debt financing, equity financing or capital contributions from shareholders, if available to us."
"On May 10, 2013, we entered into a consent agreement with Silicon Value Bank to extend until June 30, 2013 the requirement that we obtain net proceeds of not less than $3.4 million from borrowings under a new subordinated debt agreement. In addition, until receipt of such proceeds, we agreed to deposit the $500,000 of unrestricted cash, which we are required to maintain under the terms of the SVB Loan, into a restricted account at the bank. We are presently exploring new financing alternatives that we believe will comply with this requirement, though there can be no assurance that we will be able to complete such a financing by June 30, 2013 in order to comply with the requirement."
Broadwind Energy Could Be Set For A 'Towering' 2014 [View article]
Xerium's Fair Value? [View article]
Xerium's Fair Value? [View article]
My own estimate has FCF per share at $3.00 to $4.00 ($125 million in EBITDA - $30 million in interest - $15 million cap-ex - $10 million pension = $70 million and I adjusted a bit downward to be somewhat conservative, and so I'm not accused of being completely out of my mind bullish on this stock). And my price target is $25 per share, assuming no growth. If XRM grows into new markets, as they are hoping to, I'd up the target to $50 in a few years assuming they'll get a higher multiple.
Gafisa Rising - This Turnaround Looks Real [View article]
What I found most interesting in this article is that Zell was interested in buying Tenda at first! Fortunately, GFA didn't accept his offer. I bet Zell wants to buy Alphaville now to capitalize on the same opportunities he sees for Tenda. As I've mentioned in the past, Tenda, once the worst business for GFA, will, I believe, turn into a growth driver over the next few years.
Gafisa Rising - This Turnaround Looks Real [View article]
http://mwne.ws/XzARhO
You are correct that the CEO worked for the company for a long time, but that's not a big deal. Actually, I'm more interested in the CFO here, as GFA has been more of a financial turnaround than anything else. Note that the CFO was the former CEO of Alphaville.
Gafisa Rising - This Turnaround Looks Real [View article]
With GFA, what everyone is missing and what the original article here laid out nicely is that Tenda is a potential growth vehicle in the future and we'll start seeing it later this year. Investors are focused on Alphaville, because Tenda had problems in the past. But, for the long-term (and even short-term into the Olympics), Tenda is a great business if managed properly and that's why I'm still in GFA. Management appears to agree with me given their guidance for new developments in Tenda next year. I suspect that once the Alphaville saga is over, they will plow more money into Tenda.
Everyone should remember that this is a new management team at GFA and they have been turning around the company for around a year and half now. They have done a great job and I believe they know what they are doing.
As for "Selling Winners and Buying Losers", if you believe in mean reversion (for which there is ample evidence in all aspects of life), all things equal and assuming your research is good, this is a perfectly good strategy in business and investing. Yesterday's poor performers nearly always turn into the high flyers of tomorrow, and vice versa. AAPL ten years ago was surely one of the great examples of all time for the sell winners (MSFT) and buy losers (http://bit.ly/pFSoX2) mean reversion concept. So if GFA management is thinking of selling Alphaville during the current good times and investing more in Tenda during the bad times, I believe they are making a very smart move. Shareholders will thank them in a few years when all the analysts on Wall Street write glowing reports about the growth potential of Tenda (at which point we can all smile and sell).
Gafisa Rising - This Turnaround Looks Real [View article]
Gafisa Rising - This Turnaround Looks Real [View article]
Gafisa Rising - This Turnaround Looks Real [View article]
O que seria da Gafisa sem a Alphaville Urbanism (What will Gafisa be without Alphaville?). Just run the article thru Google Translate if you don't speak Portuguese. The article brings up all your points.
Basically, the market is very confused with the sale of Alphaville, but I trust management here and I do think selling is a good option for shareholders and furthermore they are somewhat forced to do this sale from what I can tell. I just wonder why they didn't opt for an IPO or spin-off. But, again I think this is because of some legal considerations shareholders do not know about. Gafisa has a current litigation going on with the former owners of Alphaville concerning the additional payments.
Anyway, I am very bullish on Tenda long-term and with the sale of Alphaville, Gafisa can recapitalize the balance sheet and plow more capital into Tenda. At least I hope that's the plan. Tenda may have performed very poorly in the past, but it has alot of potential, in my opinion, as 95% of Brazil is very poor (by even US standards), and they need better housing. So low-income housing is a strong secular trend in Brazil for next few decades. Just my thinking, after living in Brazil for some time and travelling there frequently. I am not at all bullish on high end real estate in Brazil and I am confused as to why Sam Zell is even interested in Alphaville here, except that I'm sure he has other plans or maybe hoping for a quick IPO flip. His name adds alot of weight to an IPO.
Gafisa Rising - This Turnaround Looks Real [View article]
It's not quite a statement. It's a fact. GFA is not the only homebuilder in Brazil to have lost significant value, despite a roaring real estate market in Brazil. They have all gotten killed in the last 2 years. Please take a look at PDG Realty for example, the largest homebuilder in Brazil, or look at Rossi Residencial. It's interesting that the GFA articles on SA don't reference the comparables in Brazil. I'm not sure you can understand GFA without looking a the other publicly-traded real estate construction companies in Brazil. Even though only GFA has an ADR, the other companies do have English investor relations websites. The values were not lost because of a weak real estate market in Brazil. There are other factors at play here, which you can research by reading Brazilian economic journals. A good place to start is: http://www.valor.com.br - just search for Gafisa and use Google translate if you do not speak Portuguese.
And yes, if the real estate market in Brazil suddenly crashed (which is quite possible for high-end properties, NOT low-income housing ala Tenda and Minha Casa), businesses like Alphaville (not Tenda which has government support) will get destroyed. That's a fact. I'm not saying there will be a real estate crash in Brazil on the high end of the market. In fact, I think it's unlikely near-term before the Olympics, but many many intelligent people have been screaming bubble for years in the high end. And if you went to Brazil and spoke to regular people you would understand that the bubble is truly massive on the high end of the market and is not sustainable (per sq. ft. an apartment in Ipanema in Rio, in an area where I guarantee that you will never live, is more expensive than Manhattan real estate). So yes, selling Alphaville here is not at all like selling on the bottom. It's probably close to selling at the top actually. Things like Tenda, though, are at the bottom and the mess is cleaned out. So selling Alphaville and retaining Tenda is a good strategic move in management is thinking long-term. Nevertheless, they have to sell or IPO/spin-out Alphaville, because of existing liabilities,so it's not really a choice and the argument is moot.
Anyway, once again I think you are misunderstanding some key facts about Brazil and about Brazilian homebuilders, in general (e.g. comparing Caixa to Fannie Mae misconstrues some basic facts about how Brazilian finance and government controlled entities in Brazil function as opposed to the US). But if your conclusion is the same as mine, with regards to to Gafisa, namely that the stock is a good buy here, I guess it doesn't matter.
Good luck and thanks again for the article.
Gafisa Rising - This Turnaround Looks Real [View article]
In terms of your analogies to US home builders, this is one of the things that I think is quite misguided. It is difficult for most Americans to truly understand GFA and the other home builders in Brazil, without a deeper understanding of Brazil thru either traveling there or living there. The analogies to homebuilders in the US (and to Fannie Mae as it pertains to Caixa), and the US housing crisis, is misleading.
For example, you say:
"It is for this reason that I am mystified by recent rumors it would sell such a profitable division (Alphaville). An IPO might be a possibility, but the wisdom of an outright sale at the bottom of the real estate market seems illogical to me."
This not a bottom of the real estate market in Brazil, because there hasn't been a top. The Brazilian real estate market has been booming for at least 7 years already. Prices have soared and are not correcting, as far as I can tell. There has no been no housing crisis or depression like in the US. The reason for the decline of homebuilder equities in Brazil is not due to any major housing decline in Brazil or any economic crisis. In fact, there is a disconnect between the housing boom in Brazil and the actual equity prices of the homebuilders. Understanding that disconnect is important to trying to understand the future direction in the prices of the Brazilian homebuilder equities.
With that background, it is easy to understand why management may consider selling Alphaville:
1. Alphaville targets a housing market in Brazil that is for the most part not subject to the Minha Casa program and unlike the low-income housing in Brazil, the segment that Alphaville targets is showing signs of a serious bubble. So, in fact, management would be selling at what seems to be a peak in the market, not a bottom, as you suggest. It's best to sell when things are good, and not when they are bad.
2. GFA has outstanding obligations relative to the Alphaville purchase that it must satisfy at some point. So even if Alphaville's business continues to be strong (something I think is doubtful, because of the bubble in high-end market in Brazil), GFA needs to find a way to satisfy these obligations. It's best to deal with this now, when the business is good, rather than deal with it at some later date.
3. By getting rid of Alphaville, either via IPO, spin-out, or sale, management can deleverage, and focus resources on other aspects of the business, that I think have much more potential longer-term. GFA does not need two divisions focusing on the higher end market.
That said, I agree that an IPO or spin-out of Alphaville would be better for shareholders. And the prospect of an outright sale, is one of the reasons, I believe for the recent poor performance of GFA. The other major reason for GFA's decline recently, has to do with hedge funds in the US worrying about interest rate increases in Brazil and therefore selling out of Brazilian stocks. Of course, this worry simply reflects a major misunderstanding of Brazil because as you mention raising interest rates will have little effect on the largest housing markets in Brazil (Caixa's rates for Minha Casa will be uneffected for all intents and purposes), and more importantly Brazil has long had the highest interest rates in the world, so it's doubtful any slight increase to previous rates will matter much.
Gafisa: Deeply Undervalued But Still A Speculative Investment [View article]
Additionally, you seem to have missed the most important part of the GFA story right now: Alphaville. How GFA ultimately resolve the Alphaville issues, either via a sale, IPO, spin-out etc. will be an important issue for GFA's stock price going forward.
Lastly, in terms of a bubble, I do not believe there is any evidence whatsoever for a bubble in Brazilian real estate on the low end of the market for the Minha Casa program. The bubble is primarily in properties which don't qualify for Minha Casa and at least from my travels, in Brazil is focused on key high-end areas in Rio (e.g. Ipanema and Leblon) and Sao Paulo, where there is alot of foreign buying. As long as GFA focuses development on the right projects, they will not be effected by any bubble.
Broadwind Energy: The Turnaround Is Underway [View article]
I do not believe this is necessarily a correct assumption. The recent extension of the PTC included an interesting provision whereby projects simply needs to be started by the end of 2013 to qualify for PTC. As such, I think what you will see is a big rush to get the so-called paperwork in to prove the project has started by the end of 2013, but the real business will get done over a multi-year time frame. Large wind projects take quite some time to get started and complete, particuarly at this point since the industry has been somewhat depressed for some time. Given this new provision of the PTC, I think it's a given that tower business will remain strong thru late 2015, irregardless of a new extension or not. Of course, if there is a new extension, that will be a big bonus, but I don't think it's vital to the investment case for BWEN. It's sort of icing on the cake, if it happens. Incidentally, I also think it will be extended because wind has bi-partisan support.
Broadwind Energy: The Turnaround Is Underway [View article]
That said, I also think that it's the direction of gross margins that's important when considering any investment, and not necessarily the absolute level of gross margins. It's best to invest prior to margin expansion. BWEN's gross margins will likely expand dramatically in the coming quarters for the reasons you mentioned.