Out Fox The $treet

After a horrible 2011, this Brazilian homebuilder has had a surprising start to the new year. Gafisa (GFA) was virtually left for dead as 2011 ended, but the market has probably gotten the biggest shock to see Gafisa rally big time. Similar to the move in Brazilian wireless provider NII Holdings (NIHD) , the chart below shows a much improved technical position from the start of the year.  Not only has the downtrend been broken, but the stock shows signs of breaking out to the upside. Looks like roughly a $1 higher at $7.5 will be the key resistance level. With all the interest rate cuts in Brazil towards the end of 2011, it really shouldn't be a big surprise that Gafisa at the very least has regained momentum. Looks like much more room to run as well as the stock has only returned to mid November levels. Stone Fox Capital (position sizes as of 2/17/12) Stone Fox Capital holds an allocation of 3.6% in $GFA in his Opportunistic Arbitrage Long Only ...

Stone Fox Capital is invested heavily in Gafisa (GFA) which is a large home builder in Brazil. Brazil is a market that supposedly has a 7M deficit in housing units something that bodes well for long term demand. The below interview is with the CEO of a division that GFA now owns. Tenda is the largest low income builder and I believe that GFA owns 60% (Now if I only had time to verify).