Special
Situations? - Home Builders and Related Stocks
I've
been folllowing the home builder stocks for a while and I think now
might be a good time to buy.
With Low PE's and High EPS, some of these might be worth a look.
It does, however illustrate what can happen if you
subscribe to the 'buy and hold forever' philosophy.
It also depends on exactly how soft you think the housing
market is. I don't think it is quite as bad as
our duck and cover media would leave as to believe.
You never know though - odds are they might get it right at
least once.
Homes:
| Stock |
Ticker |
June
2005 |
October
2006 |
October PE |
October EPS |
| Beazer Homes |
BZH |
53.38 |
42.6 |
4.12 |
10.33 |
| Centex |
CTX |
66.94 |
52.15 |
5.6 |
9.31 |
| Dominon Homes |
DHOM |
15.82 |
6.25 |
NA |
-.95 |
| D R Horton |
DHI |
32.04 |
23.75 |
4.79 |
4.96 |
| Hovanian Enterprises |
HOV |
31.4 |
31.63 |
4.88 |
6.48 |
| KB Home |
KBH |
67.68 |
43.89 |
4.16 |
10.55 |
| Lennar |
LEN |
59.33 |
46.86 |
5.55 |
8.44 |
| MDC Holdings |
MDC |
76.74 |
49.51 |
4.64 |
10.62 |
| Ryland |
RYL |
70.06 |
44.37 |
4.62 |
9.61 |
| Standard Pacific |
SPF |
82.4 |
26.38 |
4.12 |
6.41 |
There
is some question as to whether or not the housing bust is as bad as it
seems for all home builders.
After
a little homework I decided to pick up some DHI. I liked the
dividend increase:
10/18/2006
DHI23.61, +0.07, +0.3%)
Thursday declared a quarterly cash dividend of 15 cents
a share, a payout that
represents a 66 2/3% increase from a dividend of 9 cents
a share paid in last
year's equivalent period.
The Fort Worth,
Texas-based D.R. Horton, which is the largest homebuilder in the U.S.,
said the dividend is
payable on Nov. 1 to shareholders of record on Oct. 23.
The stock closed
Wednesday at $24.19, down 2.3%.
Home Building
Suppliers:
US
Gypsum - USG
This is one of two stocks I think worth mentioning
that was involved with asbestos litigation in the
early 2000's. The company emerged from bankruptcy
and Warren Buffet has been steadily buying.
He now owns about 20% of the company stock. The company has
around 5 billion in sales.
I own considerably less than that. I think it is
worth a small investment.
Owens Corning - OWENQ
This
company has passed all the hurdles and is scheduled to come out of
bankruptcy and start
trading on a new ticker around the end of October. It has
around 6 billion in sales.
This
one might be worth an investment as well.
Kind of depends on what price it comes out at.
I am setting a few $$ aside in case it looks attractive.
