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Bad Home Sales Numbers
- Thread starter Joab
- Start date
and don't say i told you so a month from now when we have a .5% down day.
Pulte, Beazer, Ryland, awful numbers. Beazer is being sued, withdrawls prior forecast, US attorney probing their operations. And....... stock hits a 1-month high.
Quote from rhymeswithorang:
Pulte, Beazer, Ryland, awful numbers. Beazer is being sued, withdrawls prior forecast, US attorney probing their operations. And....... stock hits a 1-month high.
Right now there is no bottom in sight, at the end of 2006 all the talking heads said that a bottom was nearing, meanwhile every CEO of every homebuilding stock came out and said "what bottom". They have been cutting forecasts and seeing profits drop with no bottom in sight. Aside from that these stocks seem to trade flat to up when any bad news is out, today XHB is up along with BZH and their horrible earnings.
Keep in mind that when the first homebuilder does report sales improving or a bottom in the near future, these stocks could easily jump 50%-100% without a problem. All indices will rally knowing that the bottom is in and that things are only going to get better. If the DOW and all major averages can withstand a housing correction, when the correction is over it will be 1999 all over again!!!
Market is telling me that there is a bottom in sight for housing, and maybe past.
Quote from rhymeswithorang:
Market is telling me that there is a bottom in sight for housing, and maybe past.
The market is telling you that? I guess what ever the CEO says is taken with a grain of salt.
BUY XHB, going to 40+, by the time the bottom is in and all homebuilders say everything is good, XHB will be at 60+.
Its good for 50% upside by the end os 2007.
D.R. Horton (nyse: DHI - news - people ) is the largest home builder in the U.S. With operations spanning 84 markets in 27 states, the company is well diversified. It also has considerable real estate holdings that have thus far held up in value rather well. Horton appears to have a very realistic view of its markets. At a recent investor conference Hortonâs CEO said bluntly "2007 is going to suck, all 12 months of the calendar year." He sees oversupply crimping home prices until 2008.
Lennar (nyse: LEN - news - people ) has grown as fast as anyone over the past five years, but it still generates strong cash flow in spite of the industry slowdown. The company has exposure to some of the weakest geographic markets, as well as more exposure to subprime borrowers than some of its competitors. On the positive side, it has shown good discipline in controlling inventories, and it appears to be suffering fewer order cancellations than many other homebuilders.
MDC Holdings (nyse: MDC - news - people ) is a regional builder with a focus in the western part of the country. While the West has had some of the most over-heated markets in recent years, MDC has been conservative in managing its land and home inventories. As a result, the company has decent measures of financial liquidity and leverage.
Pulte Homes (nyse: PHM - news - people ) does a lot of business in Florida and the Southwest, which are troubled markets, but this risk is offset by relatively low leverage on its balance sheet. It has shown cash flow deficits, but they appear manageable.
The Ryland Group (nyse: RYL - news - people ) has activities in 28 markets across the North, Southeast, West and Texas. Unlike many of its peers, Ryland achieved profitability in its fourth quarter, though revenues, new orders and its backlog have declined. The companyâs CEO has commented that only a small portion of its backlog is financed with subprime mortgages. Like Lennar and MDC, Ryland has shown restraint in inventory build-up and land purchases.
Toll Brothers (nyse: TOL - news - people ) has concentrated on the higher end of the residential market, and so it has more limited exposure to the subprime and first-time buyer markets. In addition, it focuses in the mid-Atlantic region, which appears to be less vulnerable than some other areas. The balance sheet looks reasonably solid as well. Also, Toll is still controlled by the founding family, which suggests that it may be more conservatively managed.
Lennar (nyse: LEN - news - people ) has grown as fast as anyone over the past five years, but it still generates strong cash flow in spite of the industry slowdown. The company has exposure to some of the weakest geographic markets, as well as more exposure to subprime borrowers than some of its competitors. On the positive side, it has shown good discipline in controlling inventories, and it appears to be suffering fewer order cancellations than many other homebuilders.
MDC Holdings (nyse: MDC - news - people ) is a regional builder with a focus in the western part of the country. While the West has had some of the most over-heated markets in recent years, MDC has been conservative in managing its land and home inventories. As a result, the company has decent measures of financial liquidity and leverage.
Pulte Homes (nyse: PHM - news - people ) does a lot of business in Florida and the Southwest, which are troubled markets, but this risk is offset by relatively low leverage on its balance sheet. It has shown cash flow deficits, but they appear manageable.
The Ryland Group (nyse: RYL - news - people ) has activities in 28 markets across the North, Southeast, West and Texas. Unlike many of its peers, Ryland achieved profitability in its fourth quarter, though revenues, new orders and its backlog have declined. The companyâs CEO has commented that only a small portion of its backlog is financed with subprime mortgages. Like Lennar and MDC, Ryland has shown restraint in inventory build-up and land purchases.
Toll Brothers (nyse: TOL - news - people ) has concentrated on the higher end of the residential market, and so it has more limited exposure to the subprime and first-time buyer markets. In addition, it focuses in the mid-Atlantic region, which appears to be less vulnerable than some other areas. The balance sheet looks reasonably solid as well. Also, Toll is still controlled by the founding family, which suggests that it may be more conservatively managed.
The homebuilders had a six-year run from 2000 to 2005. While we donât expect perfect symmetry on the way down, the 18 months of rough sailing that the builders have experienced since the peak is probably not enough to get things back into equilibrium. Also, while a 50% drop in stock price is nothing to sneeze at, it pales in contrast to the run-ups in the homebuilding stocks since 2000. Many of them rose 800% to 1,000% or more between 2000 and 2005.
Well, if you throw the most awful housing news at a stock in teh spae of four days and its soars, I figure thats bullish. But I'm a simpleton.
The housing market will pick up eventually, but it never really died to begin with
The media has been hyping a so called housing market collapse for the past two years and so far that hasn't really happened. The early 90's were much worse than now.
The media has been hyping a so called housing market collapse for the past two years and so far that hasn't really happened. The early 90's were much worse than now.