Posts for Ticker ‘MDC’

Looking for Next Homebuilder Merger? (DHI, TOL, NVR, MDC, LEN, KBH, RYL, MTH, HOV, MHO, SPF, XHB, ITB, PKB)

We won’t bother telling you about the homebuilder merger this morning, because we already covered it once.  But in a down and out sector, you will see that traders are looking to see if there will be other mergers in the battered group.  As you will also see, the lower market cap stocks are the ones where traders are guessing as to which will be the next take-out candidate.  Our cut off was a $100 million market cap as of yesterday and every stock in the sector that we track in the U.S. is higher.

DR Horton Inc. (DHI)….. $3.5B; +5.8% at $10.78
Toll Brothers Inc. (TOL). $3.1B; +4.5% at $18.86
NVR Inc. (NVR)……….. $2.6B; +4% at $6.86
MDC Holdings Inc. (MDC).. $1.5B; +4.5% at $30.95
Lennar Corp. (LEN)……. $1.2B; +11% at $7.98
KB Home (KBH)………… $1.1B; +6% at $14.30
Ryland Group Inc. (RYL).. $728.8M; +6% at $16.80
Meritage Homes Corp(MTH). $401.3M; +7.3% at $12.99
Hovnanian (HOV)………. $125.0M; +11% at $1.72
M/I Homes, Inc. (MHO)…. $121.7M; +2.2% at $8.72
Standard Pacific (SPF)… $100.6M; +11% at $1.00

Oddly enough, the SPDR S&P Homebuilders (NYSE: XHB) ETF is only up almost 4% at $11.37.  The other ETF, the iShares Dow Jones US Home Construction (NYSE: ITB) is up 3.5% at $9.25.  This is a slightly different ETF, but the PowerShares Dynamic Building & Construct (NYSE: PKB) is up 1.3% at $9.65 on very thin volume.

JON C. OGG

Posted on: April 8, 2009 – 8:46 am in ETF, Housing, Mergers and Buy Outs, Trading Alert, , , , , , , , , , , , , ,

Credit Suisse Starts Homebuilder Coverage (CTX, DHI, KBH, MDC, NVR, HOV, MTH)

Credit Suisse has issued a new coverage rating systems for its homebuilder universe.  These are some of the calls we saw in the sector:

  • Centex (NYSE: CTX), DR Horton (NYSE: DHI), and KB Home (NYSE: KBH) were all started with "Outperform" ratings.
  • MDC Holdings (NYSE: MDC) and NVR (NYSE: NVR) were both started as Neutral.
  • Hovnanian (NYSE: HOV) and Meritage Homes (NYSE: MTH) were started as "Underperform."

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

Posted on: June 24, 2008 – 5:50 am in Analyst Calls, Housing, , , , , , ,

Homebuilder & Housing Analyst Upgrades (KBH, MDC, PHM, TOL)

This morning, Banc of America has actually upgraded the homebuilder sector.  This may be the first such round of upgrades from a brokerage firm across the board in what seems like forever.  The price targets haven’t been seen yet, but here are some of the summary notes:

  • KB Home (NYSE: KBH), MDC Holdings (NYSE: MDC), Pulte Homes (NYSE: PHM) raised to Buy.
  • Toll Brothers (NYSE: TOL) raised to Neutral from Sell.

Homebuilder stocks were hit hard yesterday, but last week we noted how the strong rally had taken some of the homebuilder stocks up more than 100% from their lows, and some were even up 200%.

When was the last time you saw ANY good news in this sector?

Jon C. Ogg
February 5, 2008

Posted on: February 5, 2008 – 7:48 am in Analyst Calls, Housing, , , ,

Which Homebuilder Stock Goes To Zero First? (XHB, DHI, TOL, LEN, PHM, CTX, NVR, KBH, MDC, RYL, HOV, BZH)

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.

Posted on: November 27, 2007 – 3:45 pm in Housing, , , , , , , , , , , ,

Starbucks, Waiting For Earnings (SBUX, WFMI, MCD)

Starbucks Corp. (NASDAQ:SBUX) has seen its stock under pressure since the end of 2006.  Tonight it reports earnings, and First Call estimates are $0.21 EPS and almost $2.4 Billion in revenues.  The next quarter estimates are $0.21 EPS and $2.44 Billion in revenues, and next quarter marks the fiscal 2007-end.  Fiscal September-2008 looks like estimates are $1.06 EPS on revenues of $11.33 Billion, although we would caution that the range is wider than closer earnings because of 15-months outlook.

We already discussed how the company has a long way to go before itcan fix its woes.  Upon some store revisits it seems the company is trying, and we have already been given notice of some price hikes that are going to be passed on to yours truly and you.  The larger food initiative that is being rolled out on top of last year’s rollout is still in the infancy, so perhaps we’ll get a glimpse of the company’s thoughts there.  The company has been under pressure from McDonalds (NYSE:MCD) and faces other pressure from Dunkin and others.  Here was our list of suggestions in May for the company to follow after we did a series of store evaluations in various locations.

What is interesting is if we take this into the consumer-meets-investor mindset.  Last night Whole Foods (NASDAQ:WFMI) posted stronger than expected or not as weak of results, and shares are up big today as a result.  Sure these comapnies are in different segments, but what they have in common is a loyal client base AND large earnings and valuation multiples compared to their competitors.  A 30+ P/E ratio used to be a 40+ P/E ratio for the longest time.  The question is what P/E multiple can victory be declared for a fair value.  We ran a piece wondering if shares had come close to a bottom at the end of June, and that is still an outstanding item. 

It’s quite possible that this multiple may need to compress further, but using the forward 2008 multiple it trades at an estimated 25.1 forward P/E.  Some will still deem this high if the market continues its weakness and volatility, but with earnings per share growth at more than 20% it becomes and argument over who will pay what for that growth.  If you wanted to use a ‘forward’  PEG ratio of 1.25 this becomes cheaper, with the flaw being that this is trying to fast-forward a year.  Based on that, this could still face more pressure as investors and traders fight over what the true value is.  But with the 52-week high of $40.00 and the curent $26.60 price it just looks and feels like the worst could be behind it.  One earnings warning or major hiccup will blow holes in that theory, and that always has to be kept in mind. 

Starbucks also saw its most recent short interest rise from 25.8 million shares in June to almost 27.4 million shares in July.  Options traders based on a static quote mid-day appear to be braced for a price move of just over 2.2% in either direction, although that is arguable with shares being stuck between strike prices.  The average analyst price target is still $35.00 or higher.

Jon C. Ogg
August 1, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: August 1, 2007 – 1:11 pm in Earnings, Food, , , , ,

Short Sellers Boost Bet Against Homebuilders (June 2007)

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.

Posted on: June 22, 2007 – 2:54 pm in Housing, Short Interest, , , , , , , , , , , , ,

May Short Interest in Homebuilders Up (XHB, KBH, DHI, PHM, CTX, NVR, MDC, HOV, BZH, LEN, TOL, RYL)

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.

Posted on: May 22, 2007 – 8:32 am in Uncategorized, , , , , , , , , , , ,