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%)
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.
Taylor Morrison Home (TMHC +2.5%) gets a lift from a number of companies initiating coverage today. Credit Suisse starts the shares with an Outperform rating and $30 price target, citing a couple of significant factors; above-average growth driven by U.S. margin expansion and volume growth supported by land position and community count growth. Separately, Wells Fargo also initiates coverage with an Outperform, Citi starts it with a Buy, and JPMorgan with an Overweight.
Homebuilder Taylor Morrison (TMHC) +7.4% to $23.62 on its debut on the NYSE after it raised $629.2M in its IPO. The company sold 28.6M shares at $22 each, the top end of the expected range of $20-22. The size of the IPO was increased from 23.8M shares.