Homebuilders Rally, Ignore Case-Shiller Drop (LEN, PHM, BZH, DHI)
This morning’s report on the S&P Case-Shiller housing price index indicated that housing prices continue to fall in the US (our coverage here). Shortly before the January data was released, homebuilder Lennar Corp. (NYSE: LEN) posted better-than-expected earnings and revenues…
With about an hour to go in today’s trading session, the good news from Lennar is lifting other homebuilders including PulteGroup Inc. (NYSE: PHM), Beazer Homes USA Inc. (NYSE: BZH), and D.R. Horton Inc. (NYSE: DHI). Lennar noted that it had been able to increase its sales prices in the quarter ended in February, in almost complete opposition to the Case-Shiller index.
What could be happening is that we’re seeing a mismatch based on reported data. The Case-Shiller index includes data only through January, while Lennar’s quarterly results go through February. Most of the data on housing starts points to better news in the second half of the year, so what we might have here is a homebuilder front-running the price index.
Whatever’s happening, homebuilders look good today. Lennar is up nearly 5% at $27.66 after posting a new 52-week high earlier today of $28.28. PulteGroup is up about 4.7% at $9.20 in a 52-week range of $3.29-$9.69. Beazer is up about 4.4% at $3.45 in a 52-week range of $1.35-$4.79, and D.R. Horton is up 3.7% at $16.00 in a 52-week range of $8.03-$16.45.
Paul Ausick
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.