Activist Stocks'  Instablog

Activist Stocks
Send Message

Using activist investors to find actionable investing ideas. 

My company:
Activist stocks
My blog:
Learn more about activist targets with our free newsletter
  • Which Is The Best Homebuilder For 2014? 0 comments
    Feb 4, 2014 2:37 AM | about stocks: DHI, PHM

    D.R. Horton (NYSE:DHI) is the nation's leading home builder. Thus, assuming the rebound in the housing market continues, D.R. Horton should be one of the biggest benefactors. And the company is making a number of key moves to help set itself up for an even better 2014.

    The broader tailwind should be a continued recovery of the housing market. Interest rates are still at historical lows. A pickup in employment should also help boost the supply for housing. As the housing market returns to its pre-downturn level, it will drive employment upward and build consumer confidence, thus providing stimulus to the overall economy.

    Though the sales pace has slowed down slightly after interest rates started increasing, it is generally believed that this is only temporary and demand should go up once consumers adjust to both higher rates and increased pricing.

    D.R. Horton is also turning toward move-up buyers, which demand larger and a more upgraded homes. These homes are higher priced and boost profitability. During fiscal 2013, its average sales were up 16% year over year.

    The beauty of D.R. Horton is that it's the largest homebuilder in the U.S. The company has a solid return on equity at 13% and trades at less than 12 times forward earnings.

    On the other hand, PulteGroup (NYSE:PHM) beat its bottom line thanks to higher prices and margins offset a slowing sales pace. For 2013, home sales revenue were up 9% year over year. PulteGroup repurchased some two million shares for $35 million. As well, the homebuilder managed to lower its debt-to-capitalization ratio of 31%, down from 53% a year ago. PulteGroup saw its average closing price grow 13.2% year over year during 4Q 2013

    Both PulteGroup and D.R. look to be solid investments in the housing space and are our best picks for 2014.

    Stocks: DHI, PHM
Back To Activist Stocks' Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers


  • Meson Capital has taken a new activist stake in Sevcon. They own 19.9%. $SEV
    Jul 20, 2016
  • Another Activist Investor Letter To Williams Companies $WMB -- Activist Stocks
    Jul 10, 2016
  • Activist Investor Letter To Williams Companies $WMB -- Activist Stocks
    Jul 10, 2016
More »

Latest Comments

Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.