Housing Market Tracker - Housing Stocks Review

Includes: BEAM, CHB, LCUT, URI
by: Judy Weil

Here's our summary of articles and data points on the housing market. It's part of Seeking Alpha's coverage of the real estate market and homebuilder stocks. Like all other topics and stock coverage from Seeking Alpha, you can have this sent to your Blackberry or desktop email by signing up for our no-spam free email subscription service.

Housing Stocks and Housing-Related Stocks

  • United Rentals Accepts Cerberus Ruling, Seeks $100 Million Fee (Bloomberg, Dec. 24th): "United Rentals Inc. (NYSE:URI) said it will accept last week's court ruling and stop pursuing a merger agreement with Cerberus Capital Management LP, seeking instead a $100 million termination fee. United Rentals, the largest U.S. construction equipment rental company, made the announcement in a statement distributed today by Business Wire. Delaware Chancery Court Judge William B. Chandler III ruled Dec. 21 that United Rentals officials should have known that Cerberus executives believed they had a right to pull out of the deal at any time as long as they paid a $100M fee."

  • Deck the Halls With Trex - Barron's (Seeking Alpha, Dec. 23rd): "Even with a housing slump, still-high commodities and higher recycling and materials costs, Trex (TWP) has managed to cut inventory and production costs and significantly improve its product quality. Two of its rivals have folded in the slump, but Trex's October-November sales picked up and CEO Andrew U. Ferrari raised 2007 revenue guidance from $315 million- $335M to $335M-$345M. It's a risky stock, so analyst forecasts range from $0.03 to $1.05/share. Barron's says if Trex can survive the winter building doldrums, investors could see a $25-or-more share again, or as much as a 400% return."

  • Calif. Pension Fund Shifts Away From Stocks, Bonds (Washington Post, Dec. 23rd): "The California Public Employees' Retirement System will sell more than $20 billion in stocks and bonds as the largest U.S. public pension fund aims for higher returns from venture capital, commodities, real estate and several other investment options. Under a new strategy, Calpers [will] roll back its exposure to the stock market to the lowest level in 14 years. The revised investment target calls for 56% of Calpers's roughly $261B portfolio to be held in stocks, down from 60%... Calpers's fixed-income investments will drop from 26% to 19% of the portfolio... The new investment mix will require selling about $18B in bonds."

  • The Online Real Estate Sector Is Struggling (Sramana Mitra in Seeking Alpha, Dec. 21st): "Overall, ZipRealty (NASDAQ:ZIPR) outperformed the [online real estate] sector [despite] extremely difficult real estate conditions... ZIPR is remarkably cheap. [It's] $5/share [lost] almost half its value [this year] before recovering a bit on Thursday... Definitely a ripe acquisition target... Move.com posits itself as the largest, searchable database of online real estate listings... Q3 revenues posted at $75.6M, a flat result YoY. Net income posted a $4.6M loss... A nice Microsoft (NASDAQ:MSFT) partnership [means] Move will continue to be the only source of realty listing for MSN... Move.com is now trading at less than $3/share... making it the other opportunistic acquisition target."

  • Champion Enterprises Makes $114 Million Purchase (Small Cap Investor, Dec. 21st): "Champion Enterprises Inc. (CHB), the maker of factory-built housing has acquired Canadian modular homes maker SRI Homes for $114 million. “This acquisition will be accretive to Champion’s 2008 earnings..." said president and CEO William Griffiths... The buyout will also allow Champion to take advantage of SRI Homes’ retailer-based distribution channels and improve its market position in western Canada... The combined company will have a Canadian factory-built housing market share of an about 39%."

  • Lifetime Brands Acquires Part Of Mexico Cookware Company (Newsday, Dec. 21st): "Lifetime Brands Inc. has closed on its purchase of 30% of a Mexico City-based cookware manufacturer. Lifetime, a Garden-City based company that distributes kitchenware and home decor products, paid about $23 million for its stake in Ekco SAB, Mexico's largest houseswares company. "As the leading housewares company in Mexico, Ekco is the ideal partner for Lifetime to expand in Mexico and other Latin American markets," said Jeffrey Siegel, Lifetime's CEO."

  • Fortune Brands Restructuring Home And Hardware Division (Crain's Chicago Business, Dec. 21st): "Fortune Brands Inc. said it had begun to restructure its home and hardware division and would take $70M-$80 million in pretax charges to improve productivity in its supply chains. About $50M of the charges, to be incurred from Q4'07 through Q2'08, will be non-cash, the company said in a filing with the SEC... Fortune Brands... home and hardware business, that includes Simonton windows, Omega cabinets and Moen faucets... has been struggling amid a slump in the U.S. housing sector. In its most recent third quarter, profit from its home and hardware segment fell 7%."

Tracking the Housing Market and Homebuilder Stocks

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