Investors Looking for KB Homes Shares to Short

The homebuilders continued to struggle to woo buyers amid increased competition from low-priced foreclosed homes in the fallout from the U.S. recession. The short base (measured by the percent of shares outstanding on loan) of homebuilder KB Home (KBH) has increased 4.8% to 15.57% over the last week going into its Friday earnings announcement.

KBH has a high utilization (which measures the supply and demand in the securities lending market) of 47.7%. Other homebuilders with high utilization are DR Horton (DHI) with 37.91%, Centex Corp (CTX) with 36.20% and Hovnanian Enterprises (HOV) with 69.69%. Investors will be watching with interest to see how the increasing mortgage rates are affecting KBH’s revenue.

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Comments

[WACG:]

"Investors Looking for KB Homes Shares to Short"; Surely you jest or have been away for a very long time. One of the biggest problems and frauds in the markets is the Failure to Deliver scourge that the SEC allows to continue. Let me be clear - THERE IS NO NEED TO LOCATE SHARES TO SHORT. Naked shorting is rampant.

Jun 26 08:48 AM

[David Ristau:]

I think KB Homes had really positive earnings. They did miss the EPS, but they had 75% increase in profits from last year. They had 59% increase in new home orders. They are optimistic. The home companies have done the right things to reduce costs, push up profits, and the market appears to be flattening.

I am bullish long term on this housing market...

David Ristau

President, The Oxen Group
theoxengroup.com

Jun 26 12:27 PM

[Abraxas:]

Good call David. So you bought it today, didn't you?... KB Home is down 10% today alone!

"I am bullish long term on this housing market..."

The housing market can remain bearish longer than you can remain solvent. But, hey, good luck trying!


On Jun 26 12:27 PM David Ristau wrote:

> I think KB Homes had really positive earnings. They did miss the
> EPS, but they had 75% increase in profits from last year. They had
> 59% increase in new home orders. They are optimistic. The home companies
> have done the right things to reduce costs, push up profits, and
> the market appears to be flattening.
>
> I am bullish long term on this housing market...
>
> David Ristau
>
> President, The Oxen Group
> theoxengroup.com

Jun 26 01:15 PM

[basehitz:]

I love what passes for analysis.

Per AP:
KB Home lost $78.4 million, or $1.03 a share, for the three months ended May 31. (i.e., there are no profits)

CEO Jeffrey Mezger remained cautious, saying only that "We are beginning to see signs that some negative housing market trends may be moderating at both the local and national levels." (i.e., 2nd derivative stuff - less bad)

While the company's new home orders, which totaled 2,910 in the period, were up from the beginning of the year, they were 31 percent lower than the second quarter last year. (spring/summer is supposed to be better than winter, especially last winter)

Builders continue to record huge losses and soft sales, but they've been more optimistic in recent weeks as low interest rates, the federal tax credit for first-time homebuyers and bargain prices have helped to fuel sales. (i.e., as long as the govt continues to subsidize the industry with handouts and dollar debasement . . . and your grandchildren don't mind paying for it. . . )

I also am watching the homebuilders, but after the next market selloff.

Jun 26 02:44 PM