Oct. 7, 2013, 3:59 PM
- Credit Suisse's homebuyer traffic index slumped to a near 2-year low of 36 in September from 45 in August, with agents blaming increases in rates and home prices. The recent pull-back in interest rates hasn't yet led buyers to re-engage. Investor-heavy markets like Atlanta, Phoenix, Las Vegas continue to take a hit as investors pull back (some Wall Street heavyweights like Oaktree are exiting).
- Toll Bros. (TOL -0.9%) got the highest percentage of agent recommendations across all markets, with a net 34% of agents saying they would recommend the builder. Next is D.R. Horton (DHI -0.2%) with 24%. Standard Pacific (SPF -1.2%) and PulteGroup (PHM -1.1%) polled at 23%.
- XHB, ITB, PKB.
Oct. 7, 2013, 8:29 AM
- Goldman likes the brokerage business, upping Realogy (RLGY) to Buy saying worries about royalty rates and commission splits, broad housing concerns, and large stock sales are already priced into the stock. "We expect these issues to diminish over the coming quarters."
- How to buy Realogy? Take the cash from a sale of Toll Bros. (TOL), says Goldman, removing its Buy rating on the homebuilder. Despite the downgrade, Goldman still likes Toll's position at the high end of the market and sees room for material margin expansion as the company works through its land-development progress.
- TOL -2.4%, RLGY +0.4% premarket.
Sep. 24, 2013, 11:40 AM
- The Dow Jones U.S. Home Construction ETF (ITB +2.6%) gains following earnings reports from Lennar (LEN +5%) and KB Home (KBH +4.5%) - both of which showed interest rate hikes taking at least some bite out of results. Also, Case-Shiller data pointed to a slight slowing in home price increases. Homebuilders have been knocked for a loop since rates started going up in May - perhaps some sell the rumor, buy the news action is warranted today.
- In other homebuilder news, RBC Capital initiates coverage on Brookfield Residential Properties (BRP +4.1%) with a Buy and $27 price target.
- Toll Brothers (TOL +3.7%), M/I Homes (MHO +3.9%), Ryland (RYL +6%), D.R. Horton (DHI +2.2%), Hovnanian (HOV +2.1%).
- Other ETFs: XHB, PKB.
Sep. 18, 2013, 5:52 PM
- Home builders enjoyed a double boost today from the Fed's decision to maintain QE and keep interest rates low plus a report of resilient construction of single-family homes in August, but the Fed’s action simply kicks the can on a reduction of the bond-buying program and a subsequent increase in rates.
- ISI Group thinks the move doesn’t bode well in the long term for home builders: "It speaks of prolonged economic weakness that ultimately may negatively affect the builders if job growth continues its puny pace."
- But investors today were enjoying the short term, hoping a halt or slight reversal in the rise in rates will help spark home sales: BZH +4.4%, CVCO +4.8%, DHI +6.9%, HOV +5.3%, KBH +8.2%, LEN +6.5%, MDC +5.2%, MHO +5%, MTH +6.8%, NVR +3.9%, PHM +5.4%, RYL +8.7%, SPF +4.4%, TOL +5.1%.
- ETFs: XHB, ITB, PKB.
Sep. 6, 2013, 10:33 AM
- Toll Brothers (TOL), Standard Pacific (SPF), and Brookfield Homes are reportedly among the finalists for California homebuilder Shapell Homes at a price of about $1.5B.
- Shapell owns one of the largest portfolios of residential land for sale in California, with more than 5K home sites in various master-planned communities.
Aug. 26, 2013, 8:31 AM
- "Could there be more evidence in a single day that housing blew up on the rate 'surge' catalyst," asks Doug Kass following Friday's dive in new home sales and word American Homes 4 Rent has cut about 15% of its workforce.
- Hedge funds, P-E firms, and REITs have raised more than $18B to purchase over 100K homes the last two years and - if AMH is any indication - find themselves with a lot more property than they can profitably rent out. It's more than an issue for the companies and their investors - one wonders how much of this unprofitable (and apparently about to slow) activity has boosted the housing stats.
- Other stocks of interest include Silver Bay (SBY) and American Residential Properties (ARPI).
- Housing construction ETFs: XHB, ITB, PKB.
- Homebuilders of note: KBH, DHI, PHM, LEN, RYL, TOL.
Aug. 23, 2013, 10:12 AM
- July new home sales fell 13.4% to an adjusted annual rate of 394K, far below expectations of 487K. The 394K pace is still 6.8% above the pace of one year ago. Given the current pace of sales, inventory rose to 5.2 months worth of homes from 3.9 in June.
- The U.S. Home Construction ETF (ITB -3%). Weighted more heavily on building suppliers than the builders themselves, the S&P Homebuilders ETF (XHB -1.9%).
- Lennar (LEN -3.8%), Toll Brothers (TOL -4.1%), Ryland (RYL -5.1%), KB Home (KBH -4.4%), D.R. Horton (DHI -3.7%), Hovnanian (HOV -3.3%).
- Treasury prices cut sizable losses and turn green, TLT +0.3%.
- Treasury ETFs: TLH, TLT, IEF, DTYL, DLBL, ILTB, TENZ, ITE, TLO, EDV, VGIT, VGLT, TMF, TYD, LBND, UBT, UST, TMV, TYO, DSTJ, DSXJ, SBND, PST, TBT, DTYS, DLBS, TBF, TTT, TYNS, TYBS, TBX.
Aug. 21, 2013, 7:25 AM
- Toll Brothers (TOL) net profit -24% to $46.6M as the company takes a tax expense of $21.7M vs a benefit of $18.7M last year.
- Pretax profit $68.3M vs $43M.
- Signs contracts for 1,405 homes at a value of $992.6M, up from 1,119 homes and $674.4M last year.
- Cancellation rate 4.6%, unchanged from last year.
- Backlog +75% to $2.84B and +56% to 4,001 units.
- We believe the recovery is real and we are in the early stages of the rebound," says CEO Douglas Yearley. "Our average sales contracts per community are about where they were in 1997-1998.
- Guidance: FY 2013 revenue of $2.46-2.62B vs $1.88B in FY 2012 and consensus of 2.53B; deliveries of 3,925-4,125 homes vs 3,286 homes last year. (PR)
Aug. 21, 2013, 5:54 AM
Aug. 21, 2013, 12:05 AM
Aug. 20, 2013, 5:30 PM
- AEO, EV, EXXI, LOW, MSG, PETM, SJM, SPLS,TGT, TOL
Aug. 19, 2013, 12:13 PM
- Off more than 20% since its May high, the iShares U.S. Home Construction ETF (ITB -1.6%) is officially in a bear market, notes Ryan Detrick. The previous 3 instances the ETF fell 20%, it declined another 7.7% in the following month.
- Know your ETF: The S&P Homebuilders ETF (XHB -0.8%) has strongly outperformed the ITB during this 3-month slump.
- While ITB's main holdings are concentrated in actual homebuilders like LEN, PHM, DHI, TOL, and NVR, top holdings in the XHB are supply companies like Lumber Liquidators, Lennox, Lowe's/Home Depot, and A.O Smith - a homebuilder can't be found in its top 10 names.
- Other related ETF: PKB.
Aug. 16, 2013, 12:48 PM
- Struggling home builders are jumping ahead on respectable but in-line housing data, as at least overall construction has climbed in two of the past three months.
- "Looking at the underlying trend in one-family starts suggests that the pace of groundbreaking activity is actually fairly steady," an RBS economist says, unconcerned about July's drop in single-family starts since "anecdotal evidence suggests builders may be holding back on new construction in part to reap the benefits of higher prices."
- Raymond James "continue[s] to believe we are in the early stages of a sustainable up-cycle in U.S. housing," and favors Toll Brothers (TOL +1.5%), which it sees as less sensitive to mortgage rates.
- PHM +3.4%, LEN +3.1%, KBH +2.9%.
- ETFs: XHB, ITB, PKB, REZ.
Aug. 16, 2013, 8:41 AM
- Weeding out volatile multiple-family figures, July single-family starts of 591K fell 2.2% from June's revised figure of 604K. The 591K print is the lowest since last November as higher interest rates sap some of the market's energy.
- July building permits of 943K is 2.7% above June's revised rate of 918K.
- A few homebuilders premarket: TOL +0.7%, LEN +0.6%, PHM +1.2%.
- Homebuilder ETFs: XHB, ITB, PKB.
- Full report.
Aug. 15, 2013, 11:40 AM
- The NAHB builder sentiment index rises to nearly an 8-year high of 59 in August - the last time it was higher was 61 in November 2005. The move comes with the pace of new home sales nearing 500K annually, 38% higher than a year ago, but off from the 700K consistent with a healthy market.
- The HomeBuilders ETF (XHB -0.4%) continues its summer decline, though it has bounced significantly since the NAHB print hit the tape.
- Other ETFs: XHB, ITB, PKB.
- A few stocks: Toll Brothers (TOL +2%), M/I Homes (MHO +3%), Hovnanian (HOV +1.7%), Pulte (PHM +2.2%), Lennar (LEN +3.1%), Ryland (RYL +1.3%), Beazer (BZH +2.9%).
Jul. 25, 2013, 11:42 AMThe Homebuilders ETFs (XHB -2.6%), (ITB -4.3%) slip after earnings from PulteGroup (PHM -9.3%) and D.R. Horton (DHI -8.2%), with Pulte notable for reporting a big decline in orders (interest rates on the rise again aren't helping). Goldman reiterates its Sell rating on Pulte, noting the need to be selective within the sector. Others: Toll Brothers (TOL -2.4%), KB Home (KBH -5.8%), Lennar (LEN -4.8%), and also reporting M/I Homes (MHO -7.3%), and Ryland (RYL -8.1%). One homebuilder/landowner caught up in the selloff is UCP, Inc. (UCP -2.4%) - a promising play that may be the victim of a poorly-timed IPO, says SA Pro's Money Investor. | Jul. 25, 2013, 11:42 AM | 1 Comment
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