Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of South American homebuilder Gafisa
So what: The forecast suggests that borrowing costs in the country will drop and, in turn, lure consumers into purchasing more new homes. Gafisa shares have been walloped over the past several months on a string of earnings misses, so it's no surprise that traders are rushing to get ahead of a possible 2012 turnaround.
Now what: Don't let today's rally keep you from looking into Gafisa. Even with the pop, Gafisa is still down an ugly 65% over the past year and continues to trade at a single-digit P/E. And with the Brazilian housing market expected to stay hot for at least another five years, the stock doesn't feel like a value trap, either.
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