"By the end of 2005, the country was paying off its IMF loans and enjoying a relaxation of the sky-high interest rates that had been used to break the back of the country's murderous inflation. But the global economic downturn put a damper on the recovery.

"Meanwhile, Gafisa SA, which had been operating primarily in Rio de Janeiro and Sao Paulo since its inception in 1954, received an infusion of investment capital in 2003; in 2004 it put that money to use by branching out.

"The company initiated partnerships with companies outside Rio and Sao Paulo and to date it has had projects in 21 of the 26 states of Brazil.

"With a few acquisitions and an aggressive program of buying tracts of land for both commercial and residential developments, the company has been growing strongly.

"Ga?sa SA, which had been operating primarily in Rio de Janeiro and Sao Paulo since its inception in 1954, had received an infusion of investment capital in 2003; in 2004 it put that money to use by branching out.

"The company initiated partnerships with companies outside Rio and Sao Paulo and to date it has had projects in 21 of the 26 states of Brazil.

"Another part of the company's story that appeals to us is its commitment to medium and low-cost housing in addition to the high-margin luxury residences that are a builder's bread and butter. The company's Bairro Novo alliance with Odebrecht is aimed directly at the lower-income market.

"The final element of the story is that the Brazilian Central Bank just made its fifth reduction in basic interest rates, slashing rates by a half percent to 8.75%.

"While this may seem astronomical to U.S. investors (U.S. overnight rates are now in a range from 0.0% to 0.25%), it's the lowest rate ever for Brazil. In terms of real interest rates (interest rate minus in?ation rate), the rate is now 4.4%.

"Even with the threat of inflation, which is always stalking Brazil, experts predict that the central bank may shave another three-quarters of a percent off the basic rate by the end of the year. And the cheaper the money, at least compared to historical levels, the higher the level of borrowing for housing.

"As far as numbers go, Gafisa's annual sales increased 64% in 2003, 11% in 2004, 25% in 2005, 58% in 2006 and 105% in 2007. And even when the bottom dropped out in 2008, revenue still jumped 46%. Earnings have remained in the black throughout the global recession.

"After hitting a low on June 23, the stock surged to 17, corrected for a few days and then took off like a rocket. In the eight trading days since July 13, GFA has ripped higher on rising volume. The stock has now cleared its overhead back to late September 2008, so there's little weighing on it.

"With expanded operations at all economic levels, a supportive interest-rate environment, experienced management with strong business alliances, a small dividend and a red-hot chart, we think GFA is an excellent choice to buy now.

"We will be watching closely when the company issues quarterly results on August 5, but we think you can buy some here."

Steven Halpern's TheStockAdvisors.com offers a free daily overview of the favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.