Oct. 17, 2013, 10:29 AM
- Standard Pacific (SPF -0.8%) loses its Buy rating, now a Hold, and KB Home (KBH +0.5%) is cut to Sell from Hold. Both stocks have moved neck and neck this year - ahead 4.6% YTD after major pullbacks since the Treasury market blew up in May.
- RayJay also makes a couple of moves in the apartment REIT space, upping Equity Residential (EQR +0.1%) to a Buy while removing its Buy rating on Essex Property Trust (ESS -0.2%). It could be a valuation call after ESS has outperformed EQR by more than 1,000 basis points over the last year.
Oct. 10, 2013, 1:50 PM
Oct. 4, 2013, 5:38 PM
Sep. 25, 2013, 9:23 AM
- KB Home (KBH) looks to add to yesterday's big post-earnings gain, up 1.2% premarket after ISI Group pulls its Sell rating on the stock.
- Addressing the Y/Y decline in unit sales, management (earnings call transcript) talks of a deliberate attempt to move away from lower-margin inland California home sales, and instead focus on the coastal regions. 66% of California revenue came from coastal divisions, "a significant flip" from the historic mix. With just 14 additional units delivered in CA from the previous year, revenue was up by about $50M.
- Another factor behind the decline was the delay in the openings of 7 communities, allowing just one month of sales prior to the end of the quarter. Business is brisk though, says management, with pricing and margin well above projections.
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. 24, 2013, 9:38 AM
- 1,736 net orders in Q3 compares to 1,900 a year ago as company focuses on margins, rather than volume; the value of net orders rose 7% Y/Y. The cancellation rate of 33% compares to 27% in Q2, 29% a year ago. Backlogs off 3% Y/Y by homes, up 9% by value.
- Home deliveries in Q3 up 6% Y/Y; average selling price of $299,100 up 22%.
- "We believe that the recent slower pace of the recovery caused by an uptick in mortgage interest rates is a temporary effect."
- Q3 results.
- Press release.
- KBH +1.3%.
- Earlier: Lennar Q3 results.
Sep. 24, 2013, 8:35 AM
Sep. 24, 2013, 12:05 AM
Sep. 23, 2013, 5:30 PM
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.
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. 20, 2013, 5:40 PM
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.
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. | 1 Comment
Jul. 22, 2013, 2:58 PMHomebuilders (ITB -1.4%) tumble across the board after existing June home sales slipped a seasonally adjusted 1.2%. Rising mortgage rates were supposed to boost short-term demand as potential buyers aimed to lock in mortgages before rates went even higher, but the June report showed no sign of it. KBH -2.6%, RYL -2.5%, MTH -2.5%, DHI -2.2%, MDC -2.2%, HOV -2%, LEN -2%, PHM -1.6%, TOL -1.4%. | 3 Comments
KBH vs. ETF Alternatives
KB Home is engaged in the construction and sell of homes.The Company's offers a variety of new homes designed primarily for first-time, move-up and active adult homebuyers, including attached and detached single-family residential homes.
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