Dec. 18, 2013, 12:05 AM
Dec. 17, 2013, 5:30 PM
Dec. 11, 2013, 2:59 PM
- The two worst-performing sectors on a down day are industrials (XLI -1.4%) and homebuilders (XHB -1.5%), (ITB -1.9%).
- Industrials are taking a hit after Joy Global (JOY -6.3%) missed earnings estimates and provided disappointing guidance. "With a limited number of projects that can book in time to help 2014, we continue to see both the need and opportunity to lower the cost base in our business," says the company. Caterpillar (CAT -1.2%).
- Homebuilders continue to digest Toll Brothers' (TOL -1.8%) "leveling in demand" comments from yesterday's earnings results - in the 19 weeks since August 1, business has been flat vs. last year, and in the first 5 weeks of FQ1 (beginning Nov. 1) business has also been flat from 2012 (though Hurricane Sandy makes a tricky comparison).
- CEO Doug Yearley on the earnings call (transcript): "There's just not a lot of action [this time of year]. We still feel like pent-up demand is building, demographics are on our side, affordability is in place, and we are cautiously optimistic about the spring season, which begins the end of January."
- Lennar (LEN -2.3%), D. R. Horton (DHI -3%), KB Home (KBH -3.1%), Hovnanian (HOV -3.3%)
Dec. 3, 2013, 4:44 PM
- "While collecting the award is doubtful, the true value of the verdict is the validation of our integrity, credibility and transparency, which have always been cornerstones of our foundation," says Lennar's (LEN, LEN.B) CEO, Stuart Miller.
- Lennar had sued California developer Nicolas Marsch and his company Briarwood for conspiring with Barry Minkow to extort money from the homebuilder. A convicted felon, Minkow returned to prison in 2011 over his role in the scheme.
- Press release
Nov. 26, 2013, 9:34 AM
- Homebuilders have their tails in the air following this morning's housing starts report which beat expectations and also included a big building permits print - up 6.2% from September and 13.9% from a year ago.
- Full report
- ETF: XHB +0.7%, ITB +0.7%.
- Toll Bros. (TOL +1%), Pulte (PHM +1.1%), Hovnanian (HOV +1%), D.R. Horton (DHI +1.3%), Lennar (LEN -0.7%)
Nov. 25, 2013, 10:22 AM
- The homebuilders (ITB -1.1%), (XHB -0.8%) are outliers to the downside as the NAR's October Pending Home Sales Index slips to its lowest since December 2012. At 102.1, the index is also 1.6% below its level of a year ago. A bright spot in the data is its age. October, shutdowns, and debt defaults were a long time ago.
- The report has sent interest rates lower: At 2.77% just before the release, the 10-year yield is now 2.73%. TLT +0.4%, TBT -1%
- Individual homebuilders: Toll Bros. (TOL -1.3%), NVR (NVR -0.9%), KB Home (KBH -2.8%), Lennar (LEN -1.7%), Pulte (PHM -1.9%)
- Full report
Nov. 20, 2013, 8:18 AM
- Lennar (LEN) is the top pick, raised to Strong Buy from Buy, while Sell ratings are pulled on D.R. Horton (DHI) and KB Home (KBH) - both are now Holds.
- Earlier: Overall mortgage applications fell 2.3% last week, but purchase apps rose 8%. Later: October existing home sales will be reported.
- Related ETFs: XHB, ITB, PKB
Oct. 14, 2013, 10:07 AM
- It's become a buyer's market again as rising interest rates (now compounded by the D.C. budget stalemate) hit new home sales. "I think there is a weakness in the market right now," says homebuilder Mark Ward. "Everybody's giving more incentives today than they were in the summer."
- It's a big turnaround from this spring, when builders were scaling back incentives and instead raising prices by double-digit amounts. A Wells Fargo survey has 29% of respondents saying they're increasing use of incentives, double the amount of year ago.
- Lennar (LEN) cautiously admitted to boosting incentives on a "select" basis during its earnings call (transcript) last month, suggesting lower margins for the entire industry.
- Homebuilder ETFs: XHB, ITB, PKB.
Oct. 3, 2013, 11:47 PM
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, 7:26 AM
- Rising interest rates look like they're hitting at least a little bit, with new orders of 4,785 homes up 14% Y/Y vs. a 27% gain in Q2; dollar value of new orders up 32%. Backlog of 5,958 homes up 32%; dollar value up 53%. Cancellation rate of 18% vs. 14% in Q2.
- Gross margin of 24.9% up 170 basis points. Operating margin of 14.7% up 350 basis points as SG&A expense improved 180 bps to 10.2%.
- Naturally seeing a bright future for the industry, management mentions "bumps along the road" in the near-term picture.
- Q3 earnings.
- Press release.
- Earnings call at 10:30 ET.
- LEN +0.5% premarket.
Sep. 24, 2013, 6:06 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.
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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