This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Housing Top Was Sweet for KB Home Pair

As the housing market slumps, few companies are suffering as badly as KB Home (KBH - Get Report).

The homebuilder specializes in the Southern and Southwestern markets, where the pain is the worst. It recently reported a $172 million quarterly loss from continuing operations, as sales collapsed by a third. And, as we know, the results are similar across the real estate sector and, now, the mortgage business.

KB Home stock has been in free fall for most of the year, plunging roughly 40% since January, trading recently on Wednesday down 2.5% to $31.01.

Cashing out at the top is nothing new for insiders in the hard-hit homebuilder sector, as investors in Toll Brothers (TOL - Get Report) can attest. Combine the problems in that sector with the recent meltdown of mortgage companies exposed to subprime loan defaults and you have a whole lot of pain to go around in the housing industry.

The beating continued for the homebuilders today, as shares of Beazer Homes (BZH - Get Report) were punished on rumors that the company was filing for bankruptcy. Beazer called the rumors "scurrilous and unfounded." Beazer fell as much as 42% before recovering, and was recently down 14% to $12.01.

Shares of other homebuilders also were sliding Wednesday. Hovnanian (HOV - Get Report) was down 9.3%, to $12, Toll Brothers was down 2.3% to $21.43, and Lennar (LEN - Get Report) slid 2.3% to $29.81.

And what's worse than losing a fortune on these shares? Knowing you bought them at the peak of the market -- possibly from the CEO himself.

1 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,678.70 +6.10 0.03%
S&P 500 2,057.09 +5.27 0.26%
NASDAQ 4,771.7630 +13.8840 0.29%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs