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Invest with Sam Zell in Latin real estate but at a much lower price (GFA, HXM & BRAF)

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In an interview with Forbes magazine, Sam Zell, one of the most successful real estate investors ever, was bullish on international real estate, particularly in Brazil. Since the interview, related stocks such as Gafisa SA ( GFA , quote ), Homex Development Corp.( HXM , quote ) and Global X Brazil Financials, the exchange traded fund ( BRAF , quote ) for the financial sector in the country, containing many real estate assets, have all fallen sharply. This allows for investors to now buy at a discount to what Sam Zell paid.

The Forbes article by Karen Blankfeld, "The Optimist," was in late January of 2011. Since that time, Gafisa SA (GFA), a Brazilian homebuilder, has fallen more than 55%.

Homex Development Corp. (HXM), a homebuilder in Mexico, is down more than 60% over the same period. For 2011, Global X Brazil Financials (BRAF) is off more than 20%.

There is certainly no need to hurry into these securities. Growth in Brazil is slowing, which will keep real estate prices low.

But when investors such as Sam Zell, George Soros and Bill Gross are all bullish on a country, as each is with Brazil, those are all very positive indicators.

In addition, each of these stocks has strong institutional ownership, which is also bullish. When growth returns and real estate begins to rise in other countries, Homex Development Corp. Gafisa and the Global X Brazil Financial will all rebound.

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


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

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