Jun. 3, 2014, 5:30 PM
May. 28, 2014, 3:01 PM
- Jay McCanless and Annie Worthman at Sterne Agee say without the benefit of a lower tax rate other non-operating boosts, Toll Brothers (TOL +2.1%) would have missed the team's EPS estimate of $0.31 per share. They continue to rate the stock an Underperform with $28 price target.
- The bullish team at MKM Partners note Toll "essentially raised" guidance by boosting the low end of its average expected sale price this year to $690K from $675K. "Given the company’s long build cycle, we suspect that the higher guidance is likely more of a statement on the anticipated mix of closings rather than a signal that prices are being raised more aggressively."
- Amid the big gain by Toll and sharply lower interest rates, some other builders: Hovnanian (HOV +1.7%), Beazer Homes (BZH +1.4%), KB Home (KBH +0.8%), Lennar (LEN +0.2%), PulteGroup (PHM), D.R. Horton (DHI +1.2%).
- ETFs: XHB, ITB, PKB
- Previously: High home prices boost Toll results
- Previously: Toll Brothers beats by $0.09, beats on revenue
Apr. 25, 2014, 4:43 AM
- The amount that lenders originated in mortgage loans plunged 58% on year Q1 to a 14-year low of $235B, almost entirely due to drop in refinancing. The figures are from industry newsletter Inside Mortgage Finance.
- Loans for acquisitions were flat on year and lower than in Q4.
- The trend is the latest indication that increasing interest rates are hampering the housing recovery. The average 30-year fixed-rate mortgage was 4.5% last week, up from 3.6% in May last year, when rates spiked after the Fed indicated it would scale back its QE program.
- Tickers: DHI, PHM, RYL, MHO, NVR, LEN, SPF, MDC, HOV, TOL ORI, NLY, AGNC, MTGE, ARR, TWO, IVR, CMO, MFA, WMC, FMCC, FNMA, RDN, NMIH, ESNT, GNW
- ETFs/ETNs: ITB, XHB, MORT, MORL, REM, MORT, MORT
Apr. 24, 2014, 1:21 PM
- The iShares DJ U.S. Home Construction ETF (ITB +2.7%) gains as earnings roll in from D.R. Horton, PulteGroup, Ryland, and M/I Homes. While PulteGroup saw slowdowns in closings and new orders, but offsetting increases in prices, D.R. Horton reported sales, new orders, and prices all on the rise. DHI is ahead 8%, Pulte 3%, Ryland (RYL +2.2%), M/I Homes (MHO +5.9%).
- The SPDR S&P Homebuilders ETF (XHB +1.2%) is more of a homebuilding supply play.
- Other builders: NVR (NVR +3.4%), Lennar (LEN +3.5%) Standard Pacific (SPF +2.8%), M.D.C. Holdings (MDC +3.2%), Hovnanian (HOV +2.5%), Toll Bros (TOL +4.2%).
Apr. 23, 2014, 10:19 AM
- The seasonally adjusted new home sales pace of 384K in March is 14.5% below that of February and 13.3% lower than a year ago. It's the slowest pace since July, and 14.5% is the 3rd-largest decline in 20 years. The median sales price of $290K is up 12.6% Y/Y. The supply of new homes on the market is 6 months at the current sales pace, up from 5 months in February.
- Homebuilder ETFs: ITB -1.7%, XHB -1.2%.
- Toll Brothers (TOL -1.6%), Lennar (LEN -1.9%), Hovnanian (HOV -1.5%), Pulte (PHM -1.6%), KB Home (KBH -3.3%), Beazer (BZH -2.4%), Ryland (RYL -2.6%)
- The 10-year Treasury yield dips two basis points to 2.69%. TLT +0.4%, TBT -0.8%
- Full report
Mar. 12, 2014, 9:54 AM
- The homebuilders are under pressure in early action amid another set of downgrades for individual names (Toll Bros., Pulte, Lyons today), and another slowdown in mortgage applications.
- The MBA Mortgage Application Index fell 2.1% last week, with the Purchase Index off 1% on the week and 17% from a year ago.
- Reporting on Credit Suisse's latest monthly agent survey, CNBC's Diana Olick says homebuyer traffic is falling and demand is "underwhelming," but the respondents cite higher rates and home prices, not the weather.
- XHB -1.3%, ITB -1.7%.
- Individual names: Hovnanian (HOV -1%), Lennar (LEN -1.2%) D.R. Horton (DHI -1.3%), Ryland (RYL -1.5%), KB Home (KBH -1.9%), Standard Pacific (SPF -1.5%), MDC Holdings (MDC -1.9%).
Mar. 5, 2014, 10:11 AM
- Is it bad tidings from Hovnanian (HOV -5.9%) which reported a larger-than-expected loss in FQ1 (ended Jan. 31), with closings of 1,138 homes actually slipping 4.2% from a year ago (have any other homebuilders reported lower closings)?
- Revenue of $364M gained 1.6% Y/Y, with gross margin 180 bps higher to 18.8%.
- Net contracts during Q1 of 1,202 homes is off 10.6% from a year ago, with the dollar value down 1.6%. Contract backlog of 2,456 homes is up 6.7%, dollar value up 11.4%.
- SG&A expense of $60.4M or 16.6% of revenue compares with $49.3M or 13.8% of revenue a year ago.
- Ara Hovnanian: "Both sales and deliveries were impacted by poor weather conditions and deliveries were further impacted by shortages in labor and certain materials in some markets that have extended cycle times ... We have taken steps to spur additional sales in the spring selling season, including the launch of Big Deal Days, a national sales campaign during the month of March."
- Press release, FQ1 results
- CC at 11 ET
Mar. 5, 2014, 9:17 AM
Mar. 5, 2014, 12:05 AM
Mar. 4, 2014, 5:30 PM
Feb. 26, 2014, 3:56 PM
- Presenting at an industry conference this morning, management indicated Q4 net absorptions were down about 10% and Q1 absorptions will be lower on a Y/Y basis. Weather played a small role, but steep price increases over the last couple of quarters caused the biggest hit to demand.
- The company has begun "tweaking" incentives in order to boost demand in the spring selling season and reports other builders are doing the same, says Deutsche's Nishu Sood.
- "Hovnanian’s (HOV +4.5%) results give us our first look into 2014 market conditions for the builders. The comments are a negative read-through for gross margins and pricing trends in the coming quarters as builders aim to get back to the normalized absorptions level." He maintains his Hold rating and $4.50 price target.
- Presentation slides
- Earlier: Big January new home sales print boosts builders.
Feb. 26, 2014, 10:34 AM
- Brutal winter weather has been the excuse for a long string of weak economic stats this year, but not January New Home Sales, which surged 9.6% from December to a seasonally adjusted annualized pace of 468K - a 5-year high. Expectations were for a drop to 400K. December sales were revised higher from 414K to 427K.
- The median sales price rose 3.4% Y/Y to $260,100.
- The Northeast led the way with a 73.7 jump. Sales climbed 11% in the West, and 10.4% in the South. In the MidWest, they dropped 17.2%.
- Full report
- The homebuilders cheer. ETFs: XHB +1.9%, ITB +2.2%. Individual names: TOL +1.8%, HOV +2%, RYL +2.9%, KBH +2.5%, LEN +2.7%, PHM +2.3%.
Jan. 31, 2014, 11:49 AM
- The homebuilders continue a big move higher this week as the sector reports better-than-expected results from Q4, and now has the tailwind of lower rates behind it. Off four basis points to 2.66% today, the 10-year Treasury yield has tumbled about 35 basis points in January.
- A couple of upgrades has Jefferson Research raising D.R. Horton (DHI +3.5%) to a Buy and RayJay upping Pulte Group (PHM +4.5%) to Outperform.
- ETFs; XHB +1.4%, ITB +2.3%
- Toll Brothers (TOL +3%), NVR (NVR +3.6%), William Lyons (WLH +1.1%), Hovnanian (HOV +2.2%), Lennar (LEN +3.4%)
- The New Home Company (NWHM) is up 10% from last night's IPO price of $11, but the pricing range had been expected at $15-$17 per share.
Jan. 30, 2014, 9:44 AM
- Another pair of big Q4 results from the homebuilders - today Pulte and Ryland - has the entire sector on the move. ITB +1.5%, XHB +1.1%.
- Yes, mortgage rates put a crimp in sales, but higher prices more than made up for the difference, and D.R. Horton management suggests the sales pace has picked back up in January. Pulte reported new orders off 18% from a year ago, but the value of orders barely fell. Closings in Q4 were down 4% from 2012, but revenues gained 9%.
- Taylor Morrison (TMHC +0.2%), M.D.C. Holdings (MDC +1.2%), Standard Pacific (SPF +1.4%), KB Home (KBH +3.3%), Hovanian (HOV +0.8%), Toll Brothers (TOL +0.9%)
Jan. 28, 2014, 10:15 AM
- The homebuilders have their tails in their air following D.R. Horton's big earnings results which showed reports about the end of the housing recovery may be premature (DHI +8.5%). The company reported average sales price gains of 10%, orders by value up 14%, and the value of properties under contract up 20%.
- "Our weekly sales pace has accelerated in January," says Chairman Don Horton.
- XHB +1.6%, ITB +3%
- Toll Brothers (TOL +3.2%), Lennar (LEN +4.3%), KB Home (KBH +3.8%), Hovnanian (HOV +3.3%), Ryland (RYL +3.2%), Standard Pacific (SPF +3.2%), Comstock (CHCI +3.9%), Pulte (PHM +2.7%), NVR (NVR +1.4%), M.D.C. Holdings (MDC +3.6%), Taylor Morrison (TMHC +4.2%)
Jan. 17, 2014, 9:49 AM
- December housing starts of 999K fell 9.8% from November, but are up 1.6% from a year ago. SIngle family starts of 667K fell 7% from last month. For the full year, an estimated 923.4K housing units were started, up 18.2% from 2012.
- Building permits of 986K declined 3% M/M, rose 4.6% Y/Y. For the full year, an estimated 974K units were authorized, up 17.5% from 2012.
- Full report
- XHB -0.75%, ITB -0.8%.
- Builders: Toll Bros. (TOL -1.1%), Lennar (LEN -1.6%), Hovnanian (HOV -1.1%), Ryland (RYL -1.6%), D.R. Horton (DHI -1.1%), Pulte (PHM -1.4%), KB Home (KBH -0.9%).
HOV vs. ETF Alternatives
Hovnanian Enterprises Inc designs, constructs, markets and sells single-family detached homes, attached townhomes and condominiums, urban infill and active adult homes in planned residential developments.
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