PulteGroup And A Tricky Housing Market

Jul. 12, 2022 12:53 AM ETPulteGroup, Inc. (PHM)6 Comments
Leo Nelissen profile picture
Leo Nelissen
20.89K Followers

Summary

  • I start this article by diving into the fundamentals of the housing market, which is starting to show cracks - although on elevated levels.
  • PulteGroup is adjusting its business to lower demand, focusing on backlog and cash generation - used to enhance shareholder returns.
  • PulteGroup is trading at very attractive levels, but risks remain elevated. Hence, investors should apply a gradual buying approach.

Bürogebäude der PulteGroup in Schaumburg, Illinois, USA.

JHVEPhoto/iStock Editorial via Getty Images

Introduction

In the past few months, I have often discussed how tricky this market is for traders and investors. We're dealing with a toxic mix of falling economic sentiment, a very hawkish Federal Reserve, ongoing supply issues the

TradingView PHM versus 30Y mortgage rate inverted

TradingView

Median Asking Price

Redfin

Median Mortgage Payment

Redfin

Median Mortgage Payment

Redfin

Active Listings

Redfin

Sold Above List

Redfin

TradingView

TradingView (Black = Homebuilding Sentiment, Orange = Consumer Sentiment)

PHM financials

TIKR.com

PHM valuation EV/EBITDA (NTM)

TIKR.com

PHM Finviz Chart

FINVIZ

This article was written by

Leo Nelissen profile picture
20.89K Followers
I'm a Buy-Side Macro Expert/Financial Markets Analyst. On Seeking Alpha, I discuss a wide range of topics including long-term dividend (growth) investments, mid-term trading opportunities, commodities, rates, and related. A big part of my philosophy is to incorporate as much macro as possible in my articles as it helps investors to make their own decisions and to be on top of all major developments. My DMs are always open. Also, I'm on Twitter (@Growth_Value_) in case you want to say hi! Long-Term Dividend HoldingsPSA, DUK, HD, PEP, RTX, UNP, VLO, DE, ABBV, CAT, HBAN, NSC, LHX, XOM, CVX, CP, LMT, NOC, CME, DHR, EXR

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: This article serves the sole purpose of adding value to the research process. Always take care of your own risk management and asset allocation.

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