4-Star Stocks Poised to Pop: Gafisa

Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Brazilian homebuilder Gafisa (NYSE: GFA  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Gafisa's business and see what CAPS investors are saying about the stock right now.

Gafisa facts

Headquarters

Sao Paulo, Brazil

Market Cap

$2.71 billion

Industry

Homebuilding

Trailing-12-Month Revenue

$2.2 billion

Management

CEO Wilson De Oliveira (since 2005)

CFO Alceu Calciolari (since 2006)

Return on Equity (Average, Past 3 Years)

11.8%

Cash/Debt

$733.9 million / $1.74 billion

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 96% of the 2,979 members who have rated Gafisa believe the stock will outperform the S&P 500 going forward. These bulls include 2win and LoveMeSomeGreen.

Late last year, 2win highlighted Gafisa as a rather sporting selection: "Brazil real estate is booming, and will boom until after Olympics and World Cup in 2014. Buy the dip."

Over the next five years, Gafisa is even expected to grow its bottom line at a brisk pace of 44% per annum. That's much faster than foreign homebuilders Homex Development (NYSE: HXM  ) (-3.2%) and Xinyuan Real Estate (NYSE: XIN  ) (20%), as well as U.S. counterparts D.R. Horton (NYSE: DHI  ) (7.7%), Lennar (NYSE: LEN  ) (4.5%), and Toll Brothers (NYSE: TOL  ) (7%).

CAPS member LoveMeSomeGreen expands on the outperform case:

Oil and commodities prices will continue to tick up as demand increases. Better margins on exported oil means better growth for Brazil. Better growth means an expanding middle class in Brazil. An expanding middle class in Brazil will mean continued growth from mid-wealth home-builder GFA. Mmmmm logic.

What do you think about Gafisa, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


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