KB Home Flouts Bear Talk on Homes

We keep hearing that the bounce in homebuilders has to end soon. And then I see KB Home (KBH - commentary - Cramer's Take) is having a miraculous run, ever since Bruce Kravitz got his walking papers. Today's another great day for this tremendous stock.

If you take a look at what KB Home was doing before the bounce, it makes sense. It was working on starter homes and Martha Stewart-themed houses. It had successfully diversified out of the red-hot California market because Bruce, as reviled as he now is, was probably the homebuilder who saw the crash coming more than any other out there.

Now the stock won't come in. Could it be because The Wall Street Journal grudgingly admitted that first-time homebuyers are back in the market, a story it filled with an incredible number of caveats? Could it be because KB Home is by far the most likely to be taken over, even though its balance sheet is just OK?

Or is it because it has homes where population growth is causing the inventory to be worked off rather quickly?

What I don't understand is how the "rigorous" anti-homebuilding stock folks can justify what has happened with the stocks. What is their thesis? I have a bunch of reasons the stocks are going up. But I never hear from the bears why the stocks went up. They usually give some version of how the market is stupid and overly optimistic.

These stocks aren't telecom equipment stocks, to use an example of a previous crash that led to a real bounce in 2002 and then another disastrous downturn. These are smart, national companies that can adjust, switch, put homes where they are needed and buy back stock until the situation gets better.

I am waiting for some bear to say the obvious: Things are beginning to get better.

But they won't. My prediction? These bears will keep out of another 25% move -- until they finally say uncle.

And then you unload the stocks.

At the time of publication, Cramer had no positions in any of the stocks mentioned in this column.

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