Thu, Apr. 23, 10:17 AM
- PulteGroup earlier reported disappointing results which included slimming margins and muted price gains. The stock is lower by 8% in morning action.
- Minutes ago, HUD reported a far larger-than-expected slowdown in new home sales in March - with the South leading the retreat (gotta be the weather?).
- Toll Brothers (TOL -2.3%), Hovnanian (HOV -1.2%), Lennar (LEN -2.1%), Ryland (RYL -3%), D.R. Horton (DHI -3.4%), KB Home (KBH -3.5%), Beazer Homes (BZH -3%), Standard Pacific (SPF -2.8%).
- Previously: PulteGroup -7.8% as Q1 results disappoint (April 23)
- Previously: South leads big decline in new home sales (April 23)
Wed, Apr. 22, 10:52 AM
- D.R. Horton posted better-than-expected number for FQ2 (ended March 31), and calls the spring season so far a strong one. Management, however, slightly trimmed its guidance on operating margins for FQ3, and the stock is now lower by 4.8% on the session.
- Previously: Investors take profits after D.R. Horton beat (April 22)
- Lennar (LEN -0.8%), Ryland (RYL -0.9%), PulteGroup (PHM -1.8%), KB Home (KBH -0.9%), Toll Brothers (TOL -1.5%), Standard Pacific (SPF -1.2%)
- ETFs: ITB, XHB
- Previously: Treasury prices retreat after home sales number (April 22)
Tue, Apr. 21, 3:54 PM
- The REITs are down about 8% from their January highs while the homebuilders have posted gains, bringing the ratio of homebuilders to REITs to long-term resistance, says MKM Partners' Jonathan Krinsky, who suggests fading the move.
- Most vulnerable to tactical pullbacks are those homebuilders/suppliers showing the weakest relative strength: Beazer Homes (NYSE:BZH), Lennar (NYSE:LEN), Louisiana-Pacific (NYSE:LPX), Taylor Morrisn (NYSE:TMHC), Toll Brothers (NYSE:TOL), and TRI Pointe Homes (NYSE:TPH).
- The best long REIT ideas are those showing the best relative strength: AvalonBay (NYSE:AVB), Crown Castle (NYSE:CCI), Essex Property (NYSE:ESS), Extra Space Storage (NYSE:EXR), Federal Realty (NYSE:FRT), General Growth (NYSE:GGP), SL Green (NYSE:SLG), and UDR.
- Those REITs showing poor relative strength or to be avoided or sold: American Tower (NYSE:AMT), American Realty Capital (NASDAQ:ARCP), Brixmor (NYSE:BRX), Host Hotels (NYSE:HST), and Omega Healthcare (NYSE:OHI).
- Source: Barron's
Thu, Apr. 16, 11:06 AM
- Housing starts bounced just 2% to 926K in March following February's supposedly weather-related plunge. Expectations had been for a 1.05M starts in March. Gains in the northeast and midwest in March were offset by declines in the south and west.
- Toll Brothers (TOL -2.4%), Lennar (LEN -2.1%), Hovnanian (HOV -2.8%), PulteGroup (PHM -2%), Ryland (RYL -2.7%), D.R. Horton (DHI -2%), KB Home (KBH -1.9%), Standard Pacific (SPF -2.7%), NVR (NVR -1.3%).
- Previously: Lame rebound for housing starts (April 16)
- Previously: Declines in the south and west hold back housing starts (April 16)
Wed, Apr. 8, 4:37 PM
Mon, Apr. 6, 4:31 PM
- The Pavilion Property is a 190K square foot shopping center, and the Urstadt Biddle (NYSE:UBA) late last year won approval to change the zoning to allow residential apartments above ground level and restaurant uses. UBA was going to partner in the re-development, but after reconsideration thought an outright sale was the best course. Lennar (NYSE:LEN) is the buyer.
- The sale contract contains a number of contingencies, but the company expects closing near the end of fiscal 2015 or start of fiscal 2016.
- Urstadt Biddle notes the property was just a three-story department store prior to its purchase in 2002.
- Source: Press Release
Tue, Mar. 24, 10:08 AM
- New home sales in February at a seasonally-adjusted annualized rate of 539K is the fastest pace in seven years. With January's revision up to 500K (from 481K), it's the fist time sales have hit 500K for two or more consecutive months since early 2008.
- The median sales price rose 2.6% to $275.5K, and inventory stands at 4.7 months of homes on the market at the current sales pace, down from 5.7 months in January.
- Homebuilder ETFs: ITB +1.1%, XHB +1.1%.
- Toll Brothers (TOL +1.3%), Hovnanian (HOV +2.9%), Pulte (PHM +1.8%), Ryland (RYL +1.5%), Lennar (LEN +1.7%), KB Home (KBH +2.4%), Standard Pacific (SPF +1.4%).
- Full report
- Previously: New home sales fly past expectations in February (March 24)
Fri, Mar. 20, 11:38 AM
- A good week for the homebuilders gets better after KB Home's FQ1 cruised through estimates, and the company said recently contracting profit margins are set to turn the other way for the rest of the year (the stock's up 7%).
- ITB +2.3%, XHB +1.6%
- Toll Brothers (TOL +3.2%), Hovnanian (HOV +2.5%), Lennar (LEN +3.6%), Pulte (PHM +2.8%), M/I Homes (MHO +3.6%), D.R. Horton (DHI +2.1%), Ryland (RYL +2.4%), Standard Pacific (SPF +2.8%).
- Previously: KB Home on the move after earnings beat, margin comments (March 20)
Thu, Mar. 19, 7:38 AM
- FQ1 (ended Feb. 28) income of $115M or $0.50 per share vs. $78.1M and $0.35 one year ago.
- Home deliveries of 4,302 up 19%% Y/Y/
- New orders of 5,287 homes up 18%; new order dollar value of $1.8B up 24%.
- Backlogs of 6,817 homes up 20%; dollar value of $2.4B up 24%.
- Homebuilding operating income of $207.6M up 28%. Gross margin on home sales of 23.1%. Operating margin of 11.7%.
- Financial services operating income of $15.5M vs. $4.5M. Rialto operating income of $4.6M vs. $2.6M.
- "Early signals from this year's spring selling season indicate that the housing market is improving, and disappointing single family starts and permits numbers should rebound shortly."
- Earnings call at 11 ET
- Previously: Lennar beats by $0.05, beats on revenue (March 19)
- LEN +2% premarket
Thu, Mar. 19, 6:03 AM
Wed, Mar. 18, 5:30 PM
Mon, Mar. 9, 8:30 AM
- The team takes profits at Lennar (NYSE:LEN) - downgrading to Neutral from Buy after a 33% run higher over the last seven months, and moves the money into PulteGroup (NYSE:PHM) with an upgrade to Buy from Neutral. For its part, Pulte is higher by about 20% over the same time frame.
- LEN -0.7%, PHM +0.5% premarket
- Previously: Homebuilders upgraded at JMP Securities (March 9)
Thu, Mar. 5, 11:20 AM
- First-time homebuyer budgets (how much they're willing to spend) are up 24% vs. 2014, according to Bank of Montreal's (U.S.) homebuying report, and the expected down payment slips to 13% from 16% a year ago. 77% of those surveyed have made "lifestyle cutbacks" to save for a home vs. 72% in 2014.
- Turning to Texas and the effect of the energy crash, Susquehanna checks show the spring selling season is shaping up to be stronger than last year. The team visited entry-level offerings from D.R. Horton (NYSE:DHI), Pulte Group (NYSE:PHM), Lennar (NYSE:LEN), and Beazer (NYSE:BZH), and found things "surprisingly strong."
- The news supports management views of higher sales and margins, says Susquehanna, and many builders indicate price hikes of 3-5% in recent months given the strong demand. The team also notes getting a mortgage seems like less of an issue, labor is still tight, and rental costs are, in part, behind the boosted entry-level interest.
- ETFs: XHB, ITB
Tue, Feb. 24, 11:09 AM
- Toll Brothers cruised past FQ1 estimates and boosted guidance, and Meritage Homes reported big increases in new orders in January. Both of those names are ahead more than 3%.
- ETFs: ITB +1.85%, XHB +1.1%
- Others: Lennar (LEN +2.5%), PulteGroup (PHM +1.7%), Hovnanian (HOV +1.4%), Ryland (RYL +1.8%), KB Home (KBH +2%), Standard Pacific (SPF +3%), D.R. Horton (DHI +1.4%).
Mon, Feb. 23, 10:51 AM
- Existing home sales fell more than forecast in January, sliding to the lowest seasonally-adjusted annualized rate since April.
- Previously: Treasury yields head south following soft home sales report (Feb. 23)
- Compass Point throws in the towel on its Outperform calls on Standard Pacific (SPF -1.2%) and Beazer Homes (BZH -1.4%), downgrading both to Neutral.
- ETFs: ITB -0.7%, XHB -0.15%
- Toll Brothers (TOL -0.5%), Lennar (LEN -1%), Hovnanian (HOV -2.5%), PulteGroup (PHM -0.7%), Ryland (RYL -1.3%), D.R. Hoton (DHI -0.8%).
Thu, Feb. 19, 1:14 PM
- Rising demand driven by strong household formation in 2014 H2 should be tailwind, says the report, and the seven names targeted by the team give investors exposure to "move-up buyers."
- "Y/Y growth in average backlog prices was generally ahead of our assumptions in the most recent round of earnings reports, which suggests to us that the move-up buyer is the demographic where our builders can maintain or raise prices."
- PT changes (mostly thanks to boosted multiples): D.R. Horton (DHI +1.1%) to $28 from $23. Lennar (LEN +0.9%) to $44 from $38. Meritage (MTH -0.5%) to $53 from $42. PulteGroup (PHM +0.8%) to $27 from $23. Ryland (RYL +1.1%) to $53 from $45. Standard Pacific (SPF +0.7%) to $9 from $8. Tri Point Homes (TPH -0.2%) to $18 from $15.
LEN vs. ETF Alternatives
Lennar Corp is a homebuilder and a provider of financial services. Its homebuilding operations include the construction and sale of single-family attached and detached homes, and to a lesser extent multi-level residential buildings.
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