According to Reuters, the government’s auto task force will meet with GM (GM) to push ahead its restructuring.
Reuters writes that US banks may still need aid.
Reuters writes that Morgan Stanley’s (MS) Q1 earnings may be hurt by bonds.
Reuters reports that regulators may not want TARP money back soon.
Reuters reports that lower home values are widening budget gaps in many US cities.
Reuters reports that laid-off workers are sometimes finding jobs, but at much lower pay. Read More
Pulte Homes, Inc. (NYSE: PHM) is acquiring Centex Corporation (NYSE: CTX) in a stock-for-stock transaction valued at $3.1 billion, including $1.8 billion of net debt. The deal has been unanimously approved by both boards of directors. This is a deal which came out of nowhere, at least as far as the speculation game would have indicated. Centex common holders will receive 0.975 shares of Pulte common stock for each share, and as April 7, 2009 the transaction has a value of $10.50 per Centex share. This represents a pre-dilution premium of 32.6% to the 20-day volume weighted average trading price of Centex’s shares.
Read More
Credit Suisse has issued a new coverage rating systems for its homebuilder universe. These are some of the calls we saw in the sector:
We’ll follow up if we see any of the other calls in the sector out of Credit Suisse.
Jon C. Ogg
June 24, 2008
If you have been watching homebuilders of late, you’ll notice a sharp disconnect between the headlines still coming out and the stock prices of many homebuilders. The move today is partly attributed to Sam Zell’s interview on CNBC saying this spring should mark the bottom in housing. The SPDR S&P Homebuilders (AMEX: XHB) ETF shares are up 6.3% at $22.56 today, and its 52-week low is $15.22.
Keep in mind that Zell has that Gafisa SA (NYSE: GFA) as one of his big plays in Brazil, which we recently noted as one of Jim Cramer’s top picks in Brazil. We have also noted how many of these stocks had doubled from lows. Banc of America recently was the first to upgrade several of these in the homebuilder sector as well.
Today, shares of these are up big, which you can see in comparison to their 52-week lows:
Stock/Symbol Trade Change 52-wk Range Market Cap
DR Horton (DHI) $16.44 +6.06% $9.78-27.26 $5.18B
Toll Bros (TOL) $23.24 +6.02% $15.49-32.00 $3.68B
Lennar (LEN) $20.40 +8.63% $11.98-51.43 $3.26B
Centex (CTX) $26.10 +9.53% $17.77-49.85 $3.19B
Hovnanian (HOV) $10.91 +10.20% $4.25-33.32 $679.76M
Beazer (BZH) $8.74 +12.48% $4.53-42.42 $342.68M
We have noted over and over that this sector would bottom and start to recover long before the news starts to look like anything resembling good news. That may or may not be now, but when you see an ETF recover 50% from lows you have to wonder how much worse things would have to get for that recovery to not at least partially hold up. At one point, things were getting so bad we even asked "which would hit zero first?"
We still expect more bad headlines with no end in clear site. But a 50% recovery in an ETF that measures a sector has to be telling you something, even if there will be more bad days on and off and even as more headlines still look bad.
Jon C. Ogg
February 26, 2008
Everyone keeps predicting one or more of the large US Homebuilders is going to implode because of their overbuilding and inability to sell new units at their old highly profitable margins. Most of these have large land bank losses from property options being written off. inventories are through the roof, no pun intended. Well, you’ve seen and heard the news.
What we wanted to do was show a list of the old major homebuilders to show how the stocks have sold off over the last year and even how low the market caps have become in the sector. Dubai has signaled it wants to buy into a homebuilder, and that was before Abu Dhabi injected $7.5 Billion into Citigroup.
Measuring stock price alone is no way to judge, but looking at the sell-offs from the recent highs may be a judge. Some are down more than 80% from their 52-week highs.
Tick PRICE CHANGE $52-WEEK MKT-CAP
DHI $10.23 (-$0.35; -3.31%) $10.46-31.13 $3.22B
TOL $18.12 (-$0.01; -0.06%) $18.12-35.64 $2.84B
LEN $14.08 (-$0.42; -2.90%) $14.50-56.54 $2.26B
PHM $8.92 (-$0.24; -2.62%) $9.00-35.56 $2.28B
CTX $17.93 (-$0.45; -2.45%) $18.34-58.42 $2.18B
NVR $442.59 (+$8.59; +1.98%) $398.96-851.96 $2.27B
KBH $18.65 (-$1.00; -5.09%) $19.61-56.08 $1.92B
MDC $32.15 (-$0.40; -1.23%) $32.49-60.34 $1.47B
RYL $19.76 (-$0.26; -1.30%) $19.97-60.13 $831.58M
HOV $6.95 (+0.02; +0.29%) $6.92-38.66 $432.32M
BZH $7.12 (+0.15; -2.06%) $7.06-48.60 $279.16M
We aren’t going to make a determination yet as to which ones will live and which ones will bite the dust. Unfortunately you can’t even trust the balance sheets right now because there is simply no way to calculate the off-book transactions, the value writedowns that each will fess up to, and how many of these homes that were juiced-up and sold above market with rebates and incentives that some of the builders will ultimately have to take back at some point in the future.
At least one or some will likely fail. History would dictate that some cannot survive the malaise if it continues at this rate. Ultimately, some will thrive after this dust storm settles. But "ultimately" can be a long ways off.
If you noticed the news this morning you saw a 4.5% decrease in housing prices in Q3 2007 over Q3 2006, and that was after a 2.2% decrease in Q2. There is no price rebound expected in 2008, and foreclosures are expected to rise as well.
The SPDR S&P Homebuilders ETF (AMEX:XHB) shares are down 0.8% at $17.05 late in the day.
DR Horton (DHI), Toll Brothers (TOL), Lennar (LEN),Pulte (PHM), Centex (CTX), NVR Inc. (NVR), MDC Holdings (MDC), Ryland (RYL), Hovnanian (HOV), Beazer (BZH)……
Jon C. Ogg
November 27, 2008
24/7 Wall St. has an open email distribution list with other similar briefs and stories where we summarize and preview data for those interested. It is usually sent out two to three times per week.
After reviewing the 52-week lows today, it was almost the same old trend we have been seeing day in and day out…. Lenders… Banks… Homes… and Consumer…What is obvious is that the FOMC can continue to cut rates, but the consumer is stretched and the lenders don’t want to loan more funds. Hell, the borrowers might not even want to borrow either.
Freddie Mac (FRE) is hitting this list today and that is actually a low back to 2004. Fannie Mae has not hit the implode list, even after sending out payment from a class action last night. These might not all be at 52-week lows now, but lending stocks that hot new 52-week lows today are:
Lenders: (BKUNA) Bankunited Financial….habitual; (C) Citigroup; (CFR) Cullen Frost Bankers;
(CMA) Comerica; (FAF) First American; Indymac (IMB); (RF) Regions Financial; (SNV) Synovus Financial; (SOV) Sovereign; (VLY) Valley National Bancorp; (WM) Washington Mutual; (ZION) Zions Bancorp
Loan insurers: (PMI) PMI Group… not a lender, but the mortgage insurer we all hate; (RDN) Radian… financial enhancements to mortgage lenders; (TGIC) Triad Guaranty, same business as PMI.
Builders & Housing-related: Beacon Roofing (BECN), Brookfield Homes (BHS), Builders Firstsource (BLDR), Building Materials (BLG), Centex (CTX), Home Depot (HD), Lennar (LEN), Masco (MAS), M D C Holdings (MDC), Move (MOVE), Meritage Homes (MTH), Palm Harbor (PHHM)….
The earnings out of financial stocks are of course an issue, but interestingly enough yesterday Fox Business News had an exclusive interview with Warren Buffett. His comments were not any great hope that the worst has been seen in housing, and that those stocks still were not yet cheap. Take a look at Buffett’s comments that he gave exclusively to Fox Business News:
“I didn’t buy a share. I look at them. I look attheir debt, their equities. I look at everything. I’m waiting untilthey’re under priced. That’s what I look for with any security. And,I don’t think they’re undervalued. Starting 30 minutes, ending 18months ago – that year – we probably had more home builders offer toBerkshire where the managements wanted to see the business that I’veever seen in any industry. A significant percentage of thepublicly-owned home builders, when their stock was flying high andtheir management was talking bullishly, were trying to sell theircompanies. Apparently they knew what was going on or likely to go on.Though, I don’t think they saw it coming as extensively as it did.”
Jon C. Ogg
October 19, 2007
Lennar posted earnings and as expected these were just ugly. The loss was $3.25 per share after charges, although this includes charges of $3.33 per share. Revenues were $2.34 Billion. Lennar’s home sale revenue fell 44% to $2.2 billion. Cancellation rate was 32%; New orders fell 48% to 5,804 homes. And if this wasn’t foreseeable, the company will be having more job cuts in the coming quarter. Lennar shares are indicated down $1.30 to 41.70 at what will be another set of 52-week lows.
UBS has initiated coverage of homebuilders:
Lowe’s (LOW) earnings warning last night is also pulling the related and tertiary sector down.
Jon C. Ogg
September 25, 2007
We reviewed our different portfolios of key stocks to see which ones performed the best today, and it wasn’t just the financials as a general class. At the end of the day, Jim Cramer’s old list of stocks from his "Mortgage Madness Portfolio" took the cake.
This is the list: MGIC Investment (MTG), Countrywide (CFC), Bear Stearns (BSC), KB Home (KBH), Centex (CTX), Citigroup (C), Goldman Sachs (GS), Blackstone (BX), MBIA (MBI), Thornburg (TMA), Beazer (BZH), and Washington Mutual (WM).
We ran the screen right before the close, but take a look at how this portfolio did after the 50/50 dual rate cut from the FOMC today (Ticker; Price; Changes ($,%); 52-week range):
MTG $33.55 +$2.75 (+8.93%) $21.00-70.10
CFC $19.91 +$0.64 (+3.32%) $15.00-45.26
BSC $119.87 +$4.49 (+3.89%) $99.75-$172.61
KBH $29.27 +$1.15 (+4.09%) $25.95-$56.08
CTX $29.22 +$1.38 (+4.96%) $25.59-58.42
C $48.33 +$2.30 (+5.00%) $44.66-57.00
GS $200.53 +$12.92 (+6.89%) $157.38 – 233.97
BX $24.36 +$0.71 (+3.01%) $21.30 – 38.00
MBI $61.95 +$4.47 (+7.78%) $48.95 – 76.02
TMA $13.50 +$0.30 (+2.27%) $7.49 – 28.40
BZH $11.37 +$1.90 (20.06%) $8.10 – 48.60
WM $37.70 +$1.74 (4.84%) $31.27 – 46.38
If you added in Hovnanian (HOV) for it saving itself with a homebuilder firesale last weekend and add in Lehman Brothers(LEH) because of its better than expected (and far less bad) earnings from this morning, then this entire portfolio would be the hottest smoking portfolio.
This blew past the tech stocks from Cramer’s old "NEW FOUR HORSEMEN OF TECH" and it blew well past our list of defensive stocks we gave for crummy markets.
Jon C. Ogg
September 18, 2007
Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.
Stock Tickers: CTX, DHI, KBH, LEN, RYL, MHO, BECN, BLDR, MAS, XHB
After a mid-day review of 52-week lows, there was one obvious group that makes this list now more frequently than it does not: HOMEBUILDERS. Related companies are also on the list of usual suspects as well.
**denotes hit intraday 52-week lows but may be above now
Centex (CTX) $25.88; prior low $26.03
DR Horton (DHI) $13.58; prior low $13.61
KB Home (KBH) $26.43; prior low $26.55
**Lennar (LEN) $25.61; 25.50 prior low (today low $25.34)
**Ryland (RYL) $25.19; prior low 24.92 (today low $24.90)
**M I Homes (MHO) $14.82; prior low 414.81 (today low $14.65)
Those with related activities that saw intra-day lows under the prior 52-week low ar as follows: Beacon Roofing Supply (BECN), Builders Firstsource (BLDR), and Masco (MAS).
About the only good news is that the SPDR S&P Homebuilders (AMEX:XHB) shares are actually UP on the day now with the broader markets. XHB shares are up 0.8% at $22.81, and its 52-week range is $22.59 to $40.03. This ETF is being led by some of the large suppliers that serve the industry rather than by the homebuilder components themselves. Toll Brothers (TOL) and Pulte Homes (PHM) are actually up on the day.
Jon C. Ogg
September 11, 2007
Jon Ogg produces the 24/7 Wall St. SPECIAL SITUATION INVESTING NEWSLETTER; he does not own securities in the companies he covers.
Neurochem (NRMX) Continues to race for the bottom. On Monday, the company said its Alzheimer’s disease treatment candidate, Alzhemed, failed a late-stage trial. The NRMX says it has 15 to 18 months of cash left. Maybe. Drops to $2.16 from 52-week high of $26.51.
Conexant (CNXT) Israel’s Orckit Communications wins arbitration and CNXT has to pay $12 million. Does not seem like a lot but stock drops to $1.06 from 52-week high of $2.36.
Tenet Healthcare (THC) Credit Suisse analyst launched coverage on the company with an "Underperform" rating. Down to $3.29 from 52-week high of $8.69.
Lennar (LEN) Home builder. Enough said. Down to $27.26 from 52-week high of $56.54.
Centex (CTX) Home builder. Ditto. Down to $28.13 from 52-week high of $58.42.
Horton (DHI) Another home builder. Drops to $14.40 from 52-week high of $31.13.
Leapfrog (LF) Bad quarter recently and toy companies are not all the rage right now. Down to $6.91 from 52-week high of $11.56.
Douglas A. McIntyre
On tonight’s MAD MONEY on CNBC, Jim Cramer said that today and this week proves sometimes you can’t be too bullish. You need a measure for an ‘all-clear’ signal to see when the market is safe to go back into. Cramer thinks Bernanke should cut rates, particularly with more spending in Iraq than helping here for those about to lose their homes. Here are the tickers for his news "CRAMER’S MORTGAGE MADNESS INDEX":
MGIC Investment (MTG), Countrywide (CFC), Bear Stearns (BSC), KB Home (KBH), Centex (CTX), Citigroup (C), Goldman Sachs (GS), Blackstone (BX), MBIA (MBI), Thornburg (TMA), Beazer (BZH), and Washington Mutual (WM).
Cramer said he’s not saying these are buys and aren’t sells, not yet anyway. This index is just representative of the names that you have to watch because if these are still falling then it means there isn’t a stabilizing market or group.
Jon C. Ogg
August 3, 2007
Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.
On today’s video from TheStreet.com, Cramer said there is definitive value on the land that has been optioned by homebuilders. All of those options from the last 3 years were bad, but now you can at least try to quantify how bad. Centex (CTX) isn’t one to buy on its own yet in the horrible sector, but Cramer noted that this one wasn’t too bad on its land markdowns and land options it will have to write off.
He thinks right now there is not real hope for Beazer (NYSE:BZH), he doesn’t agree that either Lennar (NYSE:LEN) or Toll Brothers (NYSE:TOL) are in clear, and he thinks KB Homes (NYSE:KBH) is still in a bad spot too. These are all bad, but you are starting to figure out how bad these are on the books. He’d actually do a pairs trade where you are long Centex (NYSE:CTX) and short one of the others….
On the buyback front in his technology video segment Cramer noted Cisco Systems’ (NASDAQ"CSCO) buyback announcement with 5-days in the quarter. One buyback he noted was Corning (NYSE:GLW) from last week, but he said the quarter wasn’t that great this week. Cramer also said that 15 of 16 years you would have made money buying here on the calendar and selling later in year, and he still endorses owning the "New 4 Horsemen of Tech."
Jon C. Ogg
July 27, 2007
Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.
This morning we saw earnings out of some of the key homebuilder stocks. These numbers are almost immaterial as they are sloppy and results are all over the place and as no one is positive on these anymore, but as you could tell by the headline these names are gapping down to new recent lows.
Beazer Homes USA (NYSE:BZH) is seeing shares down over 5% in pre-market trading to $16.15. Its prior year low was $16.56. Revenue was down 37%, new orders are down 30% and cancellations are running a new high of 36%.
D.R.Horton (NYSE:DHI) is also trading down almost 3% at $16.97 pre-market; its previous yearly low was $17.03. The company posted a loss, although after disclosing $1 Billion in charges this a given after it earlier disclosed a 40% drop in new hme sales.
Pulte Homes inc. (NYSE:PHM) has not yet traded today, although shares closed within 3% of the $20.11 year-low yesterday at $20.67. Pulte posted a $507.6 million loss to $2.01 versus -$2.06 estimates. The company took $750 million in charges related mostly to land inventory right-downs.
Perhaps the best way to look at these homebuilders as a group is via the SPDR Homebuilders ETF (AMEX:XHB). These are indicated down at $27.25 to $27.40 pre-market, and $27.43 is its yearly low. If the "XHB" keeps putting in lows then most of the individual homebuilder stocks are too.
Elsewhere, shares of Lennar (NYSE:LEN) are still about 2% above their 52-week lows of $31.05. Centex (NYSE:CTX) shares are still about 2% above the $38.50 lows. Toll Brothers (NYSE:TOL) are indicated down almost 2% at $23.10 pre-market, just above the prior $23.02 prior 52-week low.
As you can tell, the carnage continues.
Jon C. Ogg
July 26, 2007
Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.
Stock Tickers: XHB, DHI, LEN, PHM, CTX, TOL, NVR, KBH, MDC, RYL, SPF, BZH, HOV
This can’t be a shock considering ‘how great’ the housing market is and how many new homes are selling in the US. There was a boost to the short selling in US-based homebuilding stocks. Oddly enough, the SPDR Hombuilder ETF (HXB) saw a fairly large drop, which means that traders are using this as a hedging instrument or they are deciding to go after the basket to to minimize headline risk in any one name. We could have listed 1- more homebuilders, but we cut the list off at the $1 Billion market cap line.
Here are the changes in the number of shares in the Short Interest:
Stock (Ticker) JUNE MAY Change
DR Horton (DHI) 30.14M 28.52M +5.9%
Centex (CTX) 17.2M 16.3M +5.4%
Toll Brothers (TOL) 23.67M 22.75M +4%
NVR Inc.(NVR) 1.31M 961K +40%
MDC Holdings (MDC) 7.19M 6.82M +5.4%
Ryland Group (RYL) 9.97M 9.43M +5.6%
Standard Pacific (SPF) 16.92M 16.28M +3.9%
Hovnanaian (HOV) 18.61M 17.52M +6.2%
Lennar (LEN) 15.52M 15.6M -0.8%
Pulte Homs (PHM) 25.03M 25.13M -0.4%
KB Home (KBH) 17.64M 17.7M -1.2%
Beazer Homes (BZH) 14.63M 15.96M -8.3%
Jon C. Ogg
June 22, 2007
Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.
Stock Tickers: XHB, KBH, DHI, PHM, CTX, NVR, MDC, HOV, BZH, LEN, TOL, RYL
The short interest for MAY 2007 is out. We noticed an increase in the number of shares in the May short interest in the beloved homebuilders, although there are some whose short interest actually fell. The SPDR Homebuilders ETF (XHB) saw its short interest rise from 19.724 million in April up to 20.233 million shares in May, or a 2.5% increase.
Here is the rest of the May short interest versus April:
STOCK (Ticker) MAY07 APR07 Change
KB Home (KBH) 17.87M 17.62M 1.4%
DR Horton (DHI) 28.52M 25.01M 14%
Pulte Homes (PHM) 25.13M 23.23M 8.2%
Centex (CTX) 16.32M 15.19M 7.4%
NVR Inc. (NVR) 961K 928K 3.5%
MDC Hldgs. (MDC) 6.82M 6.08M 12%
Hovnanian (HOV) 17.52M 15.94M 9.9%
Beazer Homes (BZH) 15.97M 14.49M 10.1%
Drop
Lennar (LEN) 15.65M 15.9M -1.6%
Toll Brothers (TOL) 22.75M 23.09M -1.5%
Ryland (RYL) 9.44M 10.7M -11.8%
Jon C. Ogg
May 22, 2007
Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.
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