Homex
HMX
pitch
long
Peter Bowley
Thesis
BUY Homex 9.75% Senior 2020 Notes. Even under aggressive downside scenarios, making money requires only a 5% probability that the notes remain performing. I estimate this probability as at least 30% due to HMX’s market leadership, strong relationships with banks, and the favorable macroeconomic outlook in Mexico.
Did it work?
failed
confidence: high
The investment thesis for Homex 9.75% Senior 2020 Notes was based on a probability of at least 30% for the notes to remain performing. However, the actual price performance has been -100%, indicating that the notes have become worthless. This outcome decisively contradicts the thesis, leading to a clear failure of the investment.
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