drmalaka

Ranking Homebuilders by Discount to Book Value

Anyone suggesting that home builders might be a buy is probably expecting the second half turn around in the economy and real estate to start in two weeks. Oh wait, the second half does start in two weeks.

To speak this way in January was one thing, but to still think at the end of June that we are headed for a strong second half in the economy and a stable second half in home builders is just nuts.

BZH ran from $5 to $12 from Jan to May, MTH from $8 to $24 in the same period. Where are they now? Wanting to buy into these beasts now is repeating the same mistakes. 2010 is when housing might bottom.

MTH and PHM have had nice little runs over the past few days and should be topping out soon in my opinion, next stop...new lows.