Homebuilders Edge Up Despite Negative Housing Start Consensus (BZH, MHO, HOV, PHHM)

Tickerspy’s Homebuilder Index

HOMEBUILDER INVESTING IDEAS

• Popular long ideas: HOV, PHM, LEN
• Popular short ideas: DHI, PHM, KBH
• Top dividend plays: XIN, KBH, LEN
• Pro favorites: LEN, DHI, NVR

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HOMEBUILDER COVERAGE

These firms typically focus on the residential markets, building, homes, condos, and apartment buildings

• Surging New Home Sales Lift Homebuilders Stocks (CVCO, NVR, BHS, BZH, HOV, KBH)
• Homebuilders Surge on Pending Sales Data (HOV, PHHM, LEN, MTH, RYL, NVR, DHI, TOL)
• Homebuilders Rally Despite Data (BHS, MTH, XIN, PHHM, PHM, RYL)

HOMEBUILDER CHART

HOMEBUILDER METRICS

Avg. Market Cap:	$3.0B
Avg. P/E Ratio:	22.3
Avg. Div Yield:	0.3%

With the expiration of the housing stimulus plans, Morgan Joseph expects that May housing starts, will fall significantly from April, and the most recent consensus is a month-to-month drop of -2.5%. The analyst noted that there are still serious concerns about the state of the housing industry moving into the second half of the year, and buyers who had the means to purchase a house have already acted, taking advantage of the now expired housing stimulus plans. Other potential buyers in the market may now choose not to act. Instead they may increase their savings rate while waiting for a more favorable purchasing environment.

As a whole the Homebuilders Stocks Index is ahead by 1% today. Most of the Index’s components are trading positively, with Beazer Homes USA (BZH), M/I Homes (MHO), and Hovnanian Enterprises (HOV) among top performers. As of this writing, Palm Harbor Homes (PHHM) is the Index’s only loser for the session.

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*HOMES Return     S&P 500 Return

The sector may be reflecting some of the expectations of more optimistic analysts about the short-term future of the housing industry. James Wilson, a JMP Securities analyst, commented to Bloomberg that he “expects U.S. home sales will continue to be choppy, but said the housing market is past its bottom.” Wilson notes that home sales activity is moving towards its April-levels, especially in California, Texas, and Arizona, according to coverage by Bloomberg.

Investors can track the Homebiulders Stocks Index for performance trends and a suite of other metrics at tickerspy.com.

Tags: BZH, HOV, MHO, PHHM