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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (41800)	8/16/2011 12:52:04 PM
From: E_K_S	Read Replies (2) of 78523

Re: Gerdau S.A. Common Stock(NYSE: GGB) - initiate a new tracking position VALE S.A. American Depositary (NYSE: VALE) - Sold off higher priced shares will buy back in 31 days Ultrapetrol (Bahamas) Limited (NasdaqGS: ULTR) - Sold off higher priced shares will buy back in 31 days finance.yahoo.com I am cleaning up several of my Brazil holdings, harvesting some losses and re-establishing a tracking position in GGB. I sold my last lot of GGB in 3/2011 for $13.32 and after a 62% price cut, I started a new tracking position at $8.20/share today. GGB seems like it is available at a good "value" entry point at current prices. I am going to put GGB in my AG basket as they machine wire and products for farming that include products such as poles, smooth wire and barbed wire. Gerdau also produces specialty steel for the manufacture of tools and machinery that are used in the growing Brazil AG sector. Analysts calculate their Forward PE at 3.95. The company currently pays close to a 2% dividend. Their LT debt to annual net income ratio of 7x is not too bad for such a large capital intensive business. Growth from the 2016 Brazil Olympics and the build out of the Brazil offshore drilling rigs/infrastructure should also support demand for their steel products. Partial sales in both VALE and ULTR will allow me to harvest some losses and reduce my cost basis. I may have the opportunity to buy back these shares in 31 days at lower prices. EKS

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