I posted Gafisa’s (NYSE: GFA) year-to-date stock performance against a brazilian index (EWZ) and S&P500.; Note how the stock is down 40% so far this year…
A few good observations (from EvoFresh) regarding brazilian real estate developer Gafisa:
We think Gafisa is starting to feel the housing tide turn against it. Now the firm isn’t in dire financial straights today and it isn’t being run by a bunch of jokers. But regardless of any strengths, when any real estate market goes down, it makes everyone guilty by association. We rate Gafisa SA a pass currently because the Brazilian real estate market looks to be getting speculative. It is becoming tougher to forecast accurately, and the firm’s most recent earnings report made it clear that even a small drop in revenue can take a big cut out of earnings.”.
On the real estate market (“It’s Different This Time”):
It’s getting hot very fast, everything in the “local” world is perfect, and the egos of people are starting to reach dangerous levels. We aren’t tying to rain on the Brazilian success parade but we’ve heard this all before and to simply forget the past, or argue that it’s different this time seems foolish. So when all variables come together, it generally doesn’t spell out a happy ending for real estate in Brazil.”
Full article here.

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