"Gafisa S.A. (NYSE: GFA) is a bet on Brazil; the company is the country's second-largest homebuilder," says international investing expert Nicholas Vardy.

In his The Global Bull Market Alert, he adds, "Brazilian homebuilders are a red-hot sector in a red-hot market. Brazil is one of the strongest-performing global markets this year, and one that you should definitely have exposure to in the final quarter of 2009.

"Brazilian homebuilders are a red-hot sector in a red-hot market. Stocks in this sector have already doubled their share prices this year as policy makers cut interest rates to a record low and the government unveiled a 34 billion real ($18.8 billion) housing stimulus plan.

Continue reading Homebuilding in Brazil: 'Hot sector in hot market'

Homebuilding in Brazil: 'Hot sector in hot market' originally appeared on BloggingStocks on Tue, 13 Oct 2009 10:30:00 EST. Please see our terms for use of feeds.

"With occupancy rates around 95%, apartment REITs appear to be the one bright spot in the REIT sector," says Asif Suria in The SINLetter; he looks at AvalonBay Communities (NYSE: AVB).

"The company generates nearly half its net operating income from the NY/NJ metro area and New England. California represents an additional 32% of net operating income.

"With a management team that is well respected and leverage that is the lowest of any apartment REIT, AvalonBay has traded at a premium over the last few years and the stock was trading at nearly $150 when I first came across the company in early 2007.

"I continued watching the company over the last two years looking for an opportunity to start a position. With a decline of over 70% from its 2007 high and a yield of 8.1%, this apartment REIT is finally at a level that not only offers a fat yield but also the potential of price appreciation.

Continue reading AvalonBay (AVB): REIT rental returns

AvalonBay (AVB): REIT rental returns originally appeared on BloggingStocks on Fri, 13 Mar 2009 11:30:00 EST. Please see our terms for use of feeds.

Homeowners lost $3.3 trillion in the value of their houses last year. A report from Zillow.com, picked up by Bloomberg, said that national home prices dropped 11.6% compared to 2007.

That makes stocks like Hovnanian (NYSE: HOV) and Beazer (NYSE: BZH) sells, even at current depressed levels. HOV shares are down to $1.64 from a 52-week high of $13.50. Beazer is off from a high of $12.40 to $0.98. The company could even face delisting over the next year if it cannot get its share price up.

There is a temptation to think that home-building stocks are so inexpensive that, if the companies can drop inventory prices enough, they can start to improve sales, even if the margins on each home sold are poor. But it is not that simple.

Continue reading New data: No recovery in home-building stocks

New data: No recovery in home-building stocks originally appeared on BloggingStocks on Tue, 03 Feb 2009 12:45:00 EST. Please see our terms for use of feeds.

"The economic crisis began in the housing sector and will likely end there," says Stephen Leeb. In his top-notch The Complete Investor he takes a contrary look at two homebuilders.

"Though my view may sound contrarian to a fault, a close look at the housing market, especially given recent government actions, suggests a recovery will happen sooner rather than later and be stronger rather than weaker.

"When home prices decline, buyers pull back, afraid of buying too soon. This leads to further declines and further buyer reluctance. No surprise, then, that housing starts have fallen dramatically.

"Meanwhile, consumers, who had been borrowing money based on the value of their homes, found this source of credit drying up, which dealt a further blow to the economy.

"It is a vicious circle indeed. Ultimately, though, it will almost certainly end with more willing lenders and a stronger housing market as the huge amounts of money being flooded into the system start boosting balance sheets of potential lenders.

Continue reading Building value: Contrary call on homebuilders

Building value: Contrary call on homebuilders originally appeared on BloggingStocks on Mon, 10 Nov 2008 13:18:00 EST. Please see our terms for use of feeds.

For speculators, Martin Weiss has uncovered a stock that benefits from rising home foreclosures. In the higher risk section of his The Safe Money Report he looks at Lender Processing Services (NYSE: LPS).

"We have a new speculative pick: Lender Processing Services. This company was spun off from Fidelity National Information Services a couple of months ago.

"It is the biggest outsourcing firm in the business of processing home loan defaults and foreclosures.

"As you might imagine, that business is booming due to the massive flood of troubled mortgages -- revenues in the company's default services unit soared 90% to $197.2 million in the second quarter from a year earlier.

"LPS also has a division that helps investors, banks and other clients model prepayments, defaults and other characteristics of mortgage-related securities.

"With everyone trying to figureout the value of all the troubled paper out there, the demand for those services should also ramp up. We emphasize, however, that this is a speculative play."

Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.

A stock that profits from foreclosures originally appeared on BloggingStocks on Tue, 21 Oct 2008 14:00:00 EST. Please see our terms for use of feeds.

"Broad-based chemical, agriculture, and 'science technology' company DuPont (NYSE: DD) is about as 'blue chip' as companies get," says Bill Martin.

In his BullMarket.com, the trading and investing expert explains, "One of the oldest firms in the country DuPont has shown it can continue to remake itself and grow." Here's his review.

"DuPont offers the potential of significant gains once the major weak links in the U.S. economy -- namely housing and the automotive sector -- rebound from their funks and eventually begin to grow.

"DuPont turned in a solid performance in the second quarter, posting a profit of $1.08 billion, or $1.18 per share, up from $972 million, or $1.04 per share, a year ago.

"The bottom line was enhanced by seven cents a share as the result of a lawsuit settlement and a lower tax rate that resulted from a one-time tax settlement. The company cited strength in is agricultural products business as well strong sales in emerging markets for the growth.

Continue reading DuPont (DD): 'As blue chip as a company gets'

DuPont (DD): 'As blue chip as a company gets' originally appeared on BloggingStocks on Wed, 10 Sep 2008 13:00:00 EST. Please see our terms for use of feeds.

"A decline in home ownership is good for companies who have apartments to rent," notes The Dave Dyer Newsletter. To benefit from this trend, he looks at Avalon Bay (NYSE: AVB)." Here is his review.

"After a 10 year period of consistent increases from 1995 to 2005, the trend toward increasing home ownership has reversed and is now clearly in decline. The subprime problems and tighter credit policies will only serve to increase the decline.

"One of the easiest ways to invest in this trend is to buy shares in a REIT that owns apartment properties. Avalon Bay (NYSE: AVB.) is a REIT that manages high quality apartment communities in the high barrier-to-entry markets like California, the Pacific Northwest, the Northeast and Mid-Atlantic.

"In some cases, they develop their own properties; in others, they buy and remodel existing apartment complexes. They currently own 182 properties with about 52,000 apartments in total. AVB has 19 more properties under constructions and development rights for another 52.

Continue reading Avalon Bay (AVB): More renters boost apartment REIT

Avalon Bay (AVB): More renters boost apartment REIT originally appeared on BloggingStocks on Tue, 26 Feb 2008 11:55:00 EST. Please see our terms for use of feeds.

Ted Allrich is the founder of The Online Investor and author of the just released book: Comfort Zone Investing: Build Wealth And Sleep Well At Night. In this weekly column, he'll offer advice to investors who are just getting started.

There's an old saying on Wall Street: Invest when there's blood in the streets. Well, the streets are getting pretty slippery, especially if you're walking in the financials or housing stocks area. If you're not buying some of these stocks, you're going to miss out on some great profits.

First, before you do anything, do some basic math on any stock you consider in the financials or housing issues. Find out what the Book Value is (on AOL you can find that in Personal Finance in the Quotes program) or on Yahoo!Finance or other quote program. The Book value is what the company is worth if you subtract all the liabilities from the balance sheet. It's what's left for stockholders if the company were to dissolve and pay the remaining money to the shareholders.

Continue reading Comfort Zone Investing: Wall Street is slippery when wet

Comfort Zone Investing: Wall Street is slippery when wet originally appeared on BloggingStocks on Sat, 17 Nov 2007 10:30:00 EST. Please see our terms for use of feeds.

Just call it the "half a loaf is better than none" or "the glass is half-full" earnings quarter, or... well you get the point.

Wall Streets' analysts expect earnings growth from S & P 500 companies to slow in the second quarter, but that doesn't mean that there won't be stand-out sectors.

For example, energy companies are expected to benefit from elevated oil prices, barely-adequate gasoline refinery capacity, and solid demand for petroleum-based products.

Also, the industrial and technology sectors are expected to fair well: the industrials boosted by continued strong global growth, the techs aided by corporate information technology spending.

On the downside, likely to post sub-par earnings results include the auto and housing companies: U.S. automakers are battling operational restructuring and a slowdown in consumer spending, while the housing sector continues to correct, due to a large supply of unsold homes, rising interest rates, and subprime loan defaults.

Market-wide, analysts expect S & P 500 companies to post Q2 year-over-year earnings growth of 4.4%, according to Thomson Financial. If that sounds like a modest slowdown compared to the double-digit earnings growth prior to 2007, you're right, and Wall Street has, accordingly, "lowered the earnings expectations bar" for this quarter. Hence, in general, companies that fail to exceed analysts' earnings estimates by 10% are not likely to face as harsh a treatment by investors as they would in quarters past, when the earnings expectations bar was higher.

Still, given the strong correlation between earnings growth and stock prices, lowered expecations or not, this quarter's earnings performance will provide investors with a telling data point regarding whether there's fundamental evidence to drive stock prices higher, and by extension, to continue the market's bull run of 2007.

Q2 earnings season: modest expectations for S & P 500 companies originally appeared on BloggingStocks on Tue, 10 Jul 2007 02:15:00 EST. Please see our terms for use of feeds.

Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.

Lennar Corp. (NYSE: LEN) is the favorite conservative investment for 2007 from Bernie Schaeffer, editor of The Option Advisor. He notes, "Lennar, one of the largest homebuilding firms in the U.S., is built on a very solid foundation.

"For more than 20 quarters running, the stock has exceeded or matched analysts' per-share earnings expectations. Despite negative earnings revisions and poor housing statistics during the past few months, homebuilding stocks have actually rallied from their July 2006 lows.

"For its part, LEN is back up near six-month highs. It has been a relative-strength leader when compared to its peers in the outperforming ISE Homebuilders Index. Meanwhile, options players are firmly entrenched in the bearish camp. And, nearly 9% of the equity's float has been sold short.

"Analysts are still leery of LEN, as evidenced by the latest Zacks data. Of the 12 brokerage firms ranking the shares, five have awarded a 'hold' rating while two list the stock as a 'strong sell.' A continued upward drive in the shares could spur some upgrade activity, drawing positive attention toward the equity."

To see Bernie's favorite speculative idea for 2007, click here.

Top Picks 2007: Schaeffer sees solid foundation under Lennar originally appeared on BloggingStocks on Thu, 21 Dec 2006 08:30:00 EST. Please see our terms for use of feeds.

Top investors know that the best time to buy is when everyone thinks it's crazy to buy. Look at Wilbur Ross Jr. Over the years, he has made a fortune by investing in a variety of long-dead industries, such as steel, coal and textiles.

Yes, this takes a lot of guts. And, it is still quite risky - and it can take years for an industry to come back (also, in the case of Ross, he has the advantage of forcing changes to create better values).

Still interested in taking a contrarian bet? Well, Barron's front cover piece this week ("Big Ripple") is about the opportunities in the real estate biz. Given all the bad news, this is certainly a gutsy call - but, for investors, there may be opportunity.

According to the article, housing stocks are priced for a prolonged fall in the real estate sector. However, if this does not turn out to be the case, these stocks could be bargains.

Home builders, for example, are down 65% over the past year. And some are selling below book value, like MDC Holdings (MDC), Hovnanian Enterprises (HOV) and WCI Communities (WCI).

In fact, there may be a catalyst to get these stocks moving. That is, as valuations get extremely low, there may be a spate of acquisitions and leverage buyouts. Also, expect increased stock buybacks.

True, a turnaround is far from guaranteed. Things may really implode over the next few years. But, for the most part, the housing sector looks like a pretty good play for any contrarian investor.

Hey, even famed mutual fund manager, Bill Miller, is bullish on the sector, with holdings like Centex (CTX) and Pulte (PHM).

Tom Taulli is the author of various books, such as the Complete M&A Handbook and operates InvestorOffering.com.

Barron's: Time to buy real estate stocks? originally appeared on BloggingStocks on Mon, 28 Aug 2006 09:05:00 EST. Please see our terms for use of feeds.