Gafisa SA (ADR) (GFA), Gol Linhas Aereas Inteligentes SA (ADR) (GOL), NII Holdings Inc (NIHD): Invest In These Beaten Down Brazil Stocks

Wireless provider

NII Holdings Inc (NASDAQ:NIHD) owns valuable 3G licenses in prime countries such as Brazil and Mexico, yet the company was late to upgrade networks from 2G that operations have struggled considerably beginning in 2012. Now that the 3G networks are coming online, the stock has stabilized around $6, but any investors that bought the stock back over $40 in 2011 probably isn’t too happy.

Analysts expect massive losses in 2013 and 2014, which contributed greatly to the recent stock losses. NII Holdings Inc (NASDAQ:NIHD) has a subscriber base of 11.5 million and managed to add 152,000 net additions during Q1. The biggest issue though has been a substantial decline of $7 in ARPU year over year. With a market cap of only $1.2 billion, the stock offers intriguing value if it can stop the ARPU losses as it moves subscribers to 3G services.

Bottom line

While most Brazilian and even emerging market stocks in general have been crushed, the stocks of Gafisa SA (ADR) (NYSE:GFA), Gol Linhas Aereas Inteligentes SA (ADR) (NYSE:GOL), and NII Holdings Inc (NASDAQ:NIHD) face additional headwinds due to weak balance sheets. That combination has most domestic investors fleeing the stocks during this period of market weakness. A rebound in Brazil could send these stocks soaring if the trio doesn’t run into liquidity issues first.

The article Invest In These Beaten Down Brazil Stocks originally appeared on Fool.com and is written by Mark Holder.

Mark Holder and Stone Fox Capital Advisors, LLC have no positions in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Mark is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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