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Strategies & Market Trends : Value Investing

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To: E_K_S who wrote (31503)	8/13/2008 11:43:08 AM
From: E_K_S	Read Replies (2) of 78531

Started small position in Gerdau S.A. (GGB) the South American steel producer. Pretty good Q2 2008 report. UPDATE 2-Gerdau 2nd-qtr profit soars 85 pct on strong sales reuters.com From the article:"...In Brazil, Gerdau's second-biggest market after North America, net revenue increased 47.5 percent, driven by robust demand from the construction and automobile industries. The company cut back on exports from its Brazilian operations to funnel more steel to the booming domestic market...." ========================================================== I am expecting continued growth in Brazil. The value proposition for me is low forward PE at 7, better than industry operating margins and located in large growth market. Negatives are high debt and the company would be impacted by slower world wide growth especially in North America. The company adds another sector of diversification to my other Brazil holdings. A stronger U.S. dollar would allow GGB to expand their domestic (South America) production where their operations are the most efficient and profitable. EKS

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