Brazilian homebuilders: weak numbers, broken sector

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Global players love to love the Brazilian construction names when they are faring well, but even on the bad days this is a crowded trade at best. The reality is that this has been a horrible run for companies that burn cash, are interest-sensitive and are now watching their receivables rise through the roof as customers put off payments. You can trade one of the big names, Gafisa ( GFA , quote ), in New York. This company is working around existing guidance that launches and presales in the first quarter were weak. The company is trading at 8.5 times 2011 estimated earnings and 6.8 times estimated 2012 earnings, but these numbers could be adjusted as earnings per share growth continues to sag. Reported earnings were good over a month ago ,  but still lots of headwinds for this name.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Stocks


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