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ValuEngine Weekly Newsletter September 24, 2010

|Includes:BZH, CAA, DHI, KB Home (KBH), LEN, MDC, MHO, MTH, PHM

 

 

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September 24, 2010
The ValuEngine Weekly is an Investor Education newsletter focused on the quantitative approach to investing and the tools available from ValuEngine. In today's fast-moving and globalized financial markets, it is easy to get overloaded with information. The winners will adopt an objective, scientific, independent and unemotional approach to investing. If you are not yet a member of ValuEngine's stock analysis service, sign up now for a two-week free trial at www.valuengine.com!

 

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  Bonus for Readers
--Free Individual Stock Report for Weekly Newsletter Subscribers

 As a bonus to our Free Weekly Newsletter subscribers, we are now offering a FREE DOWNLOAD of one of our $ 25.00 Detailed Valuation Reports.  

  This week's free download is our report on KB Homes (NYSE:KBH).   KB reported earnings this week and their numbers were added to a pot of data that shows a continuing mixed bag for the housing market.  Data has improved in some respects, but the builders themselves keep lowering expectations.    In KB's case, the company posted a narrower loss for the quarter--$0.02/share vs $0.87/share for q3 last year.  However, they also warned of continued difficulties for the housing market. 

   KB Home is a builder of single-family homes with domestic operations in several western states, and international operations in France. Domestically, the company builds homes which cater primarily to first time homebuyers, generally in medium-sized developments close to major metropolitan areas. Internationally, the company also builds commercial projects and high density residential properties such as condominium complexes.

 ValuEngine has issued a STRONG BUY recommendation for KB HOME. Based on the information we have gathered and our resulting research, we feel that KB HOME has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE market valuation, expected EPS growth and price/sales ratio.  KB displays some very high forecast figures that improve over time and is calculated to be very undervalued.  

Weekly Subscribers can download a FREE Detailed Valuation Report on KB HOME HERE.

If you have not subscribed and want to be able to receive a FREE $ 25.00 Detailed Valuation Report, you can subscribe to our Free Weekly Newsletter HERE.

ValuEngine Index Overview
Index
Week Open
Thurs. Close
Change
% Change
YTD
DJIA 10608.08 10662.42 54.34 0.51% 2.22%
NASDAQ 2322.8 2327.08 4.28 0.18% 1.42%
RUSSELL 2000 652.86 648.84 -4.02 -0.62% 3.30%
S&P 500 1126.57 1124.83 -1.74 -0.15% 0.74%
ValuEngine Market Overview
Summary of VE Stock Universe
Stocks Undervalued
68.32%
Stocks Overvalued
31.68%
Stocks Undervalued by 20%
35.53%
Stocks Overvalued by 20%
10.89%

 

ValuEngine Sector Overview
Sector Change MTD YTD Valuation Last 12-MReturn P/E Ratio
Basic Industries -1.24% 3.20% 16.83% 0.03% overvalued 30.41% 23.38
Energy -0.38% 5.23% -0.42% 0.21% undervalued 21.64% 24.73
Public Utilities -0.74% 0.90% -3.49% 2.97% undervalued 10.35% 18.81
Transportation -1.58% 3.32% 6.99% 3.23% undervalued 11.21% 18.76
Finance -0.76% 2.45% 7.72% 7.96% undervalued 0.26% 17.90
Consumer Non-Durables -0.79% 2.89% 3.88% 8.25% undervalued 16.25% 16.69
Consumer Services -0.69% 4.71% 6.41% 9.19% undervalued 9.49% 20.65
Capital Goods -1.23% 2.77% 11.01% 9.86% undervalued 7.15% 20.32
Technology -0.50% 6.30% 10.94% 12.20% undervalued 16.65% 23.97
Consumer Durables -1.09% 3.58% 7.91% 13.45% undervalued 17.74% 17.32
Health Care -0.91% 4.68% 16.63% 14.12% undervalued -1.51% 21.37

 

Industry Talk--Home Builders

     As we note in almost every mention of housing--and as Chief Market Strategist Richard Suttmeier explains in his more in-depth analysis, it is difficult to predict an end to the housing woes as long as there is a huge amount of excess inventory, foreclosures continue unfold, and the national employment picture remains grim.  Some analysts see an extra 30% of bubble still waiting to deflate, and whether than happens short or longer term is still unknown.  However, the Forecast Model is predicting good things for several of the Home Builders and now rates half of the Industry a buy or strong buy. 

 Below, we present various top-five lists for the Home Building Industry from our Institutional software package (Pending:VEI).  

Top-Five Home Builder Stocks--Short-Term Forecast Returns

Ticker Name Mkt Price Valuation(%) Last 12-M Retn(%)
BZH BEAZER HOMES 3.98 -74.76 -33.89
MDC MDC HLDGS 28.24 -27 -20.29
SPF STANDARD PAC 3.81 -63.18 -6.62
LEN LENNAR CORP -A 14.69 -48.26 -4.3
KBH KB HOME 11.71 -58.66 -36.74

Top-Five Home Builder Stocks--Long-Term Forecast Returns

Ticker Name Mkt Price Valuation(%) Last 12-M Retn(%)
BZH BEAZER HOMES 3.98 -74.76 -33.89
MDC MDC HLDGS 28.24 -27 -20.29
SPF STANDARD PAC 3.81 -63.18 -6.62
KBH KB HOME 11.71 -58.66 -36.74
LEN LENNAR CORP -A 14.69 -48.26 -4.3

Top-Five Home Builder Stocks--Composite Score

Ticker Name Mkt Price Valuation(%) Last 12-M Retn(%)
LEN LENNAR CORP -A 14.69 -48.26 -4.3
MTH MERITAGE HOMES 18.86 -34.29 -6.4
SPF STANDARD PAC 3.81 -63.18 -6.62
DHI D R HORTON INC 10.62 -42.13 -13.59
MDC MDC HLDGS 28.24 -27 -20.29

Top-Five Home Builder Stocks--Most Undervalued

Ticker Name Mkt Price Valuation(%) Last 12-M Retn(%)
KBH KB HOME 11.71 -58.66 -36.74
MHO M/I HOMES INC 10.15 -59.32 -36.2
PHM PULTE GROUP ONC 8.18 -60.68 -31.2
SPF STANDARD PAC 3.81 -63.18 -6.62
BZH BEAZER HOMES 3.98 -74.76 -33.89

  VE Premium Website Stock Analysis subscribers can find complete valuation, forecast, and ratings data on every individual equity in our universe of more than 7000 equities HERE.

   Seeking Alpha Readers should check out our Seeking Alpha VE Investment App HERE

 


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Disclosure: no positions
Stocks: KBH, BZH, MDC, CAA, LEN, MTH, DHI, MHO, PHM