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The SPDR Homebuilders ETF (XHB) was trading as low as $8.00 in March 2009. The index is currently trading at $30.80 or 285.0% above the low made in March 2009.

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In this article, I will feature one homebuilder that has seen intensive insider buying during the last 30 days. Intensive insider buying can be defined by the following three criteria:

  1. The stock is purchased by three or more insiders within one month.

  2. The stock is sold by no insiders in the month of intensive purchasing.

  3. At least two purchasers increase their holdings by more than 10%.

PulteGroup (PHM) engages in homebuilding and financial services businesses primarily in the United States.

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Insider buying by insider (last 30 days)

  • Thomas Folliard purchased 20,000 shares on August 2 and currently holds 38,914 shares or less than 0.1% of the company. Thomas Folliard serves as a director of the company.
  • Bryce Blair purchased 6,140 shares on July 29 and currently holds 69,627 shares or less than 0.1% of the company. Bryce Blair serves as a director of the company.
  • Andre Hawaux purchased 3,000 shares on July 29 and currently holds 9,180 shares or less than 0.1% of the company. Andre Hawaux serves as a director of the company.

Financials

The company reported the second-quarter financial results on July 25 with the following highlights:

Revenue$1.3 billion
Net income$36.4 million
Cash$1.3 billion
Debt$2.1 billion
Backlog$2.7 billion

Competition

PulteGroup's competitors include DR Horton (DHI), KB Home (KBH) and Lennar Corp. (LEN). Here is a table comparing these companies.

CompanyPHMDHIKBHLEN
Market Cap:6.64B6.57B1.48B6.70B
Employees:3,6343,4771,2004,722
Qtrly Rev Growth (yoy):0.200.470.730.53
Revenue:5.31B5.74B1.93B4.87B
Gross Margin:0.180.200.160.25
EBITDA:365.03M576.60M44.25M603.51M
Operating Margin:0.060.100.020.12
Net Income:293.55M423.30M-4.45M399.88M
EPS:0.761.23-0.061.84
P/E:22.7516.54N/A18.86
PEG (5 yr expected):0.312.0511.195.57
P/S:1.211.130.761.35

PulteGroup has the second highest P/S ratio among these four companies. Lennar has seen some insider selling in July and one insider buy transaction in June. DR Horton and KB Home have not seen any insider buying this year but have both seen some insider selling during the past six months.

Conclusion

There have been three different insiders buying PulteGroup and there have not been any insiders selling PulteGroup during the last 30 days. PulteGroup has an insider ownership of 0.90%. There are eight analyst buy ratings, 12 neutral ratings and two sell ratings with an average target price of $20.35. The stock is trading at a P/E ratio of 22.75 and a forward P/E ratio of 10.75. PulteGroup has a book value of $6.04 per share and the stock has a dividend yield of 1.16%. I have a cautiously bullish bias for the stock currently based on the intensive insider buying.

Source: Insiders Are Buying PulteGroup