This Day On The Street
Continue to site
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

Crunch Time at Ryland, Pulte Homes

Homebuilders and other real estate stocks have been rallying with the financials over the past week, but dismal earnings from Pulte Homes (PHM - Get Report), Ryland (RYL - Get Report) and Starwood Hotels (HOT - Get Report) are working to punish the sector today.

The three stocks are included in my Bricks and Mortar mock portfolio, which has been trading sideways of late along with the broader market.

At a time when only falling oil prices seem to spark a rally in stocks, it's not easy for investors to make money in the stock market. An even year -- one in which your portfolio loses no money -- may prove the best you can ask for in 2008.

The long-short Bricks and Mortar mock portfolio is down 3.9% this year, based on Wednesday's closing prices, better than the 12.7% decline in the S&P 500 but worse than the 0.7% gain in the U.S. MSCI REIT Index.

The obvious conclusion here is that my real-estate heavy portfolio should have carried more real estate investment trusts, or REITs. Then again, that sector is looking pricey today, and I believe better long-term value exists in the casino and lodging stocks. That's why my mock portfolio is long several stocks in these sectors, while staying short homebuilders and construction companies.

Today's results boost my underweight thesis on the builders as both Ryland and Pulte Homes reported massive losses in their latest quarters. Both stocks carry "flag" ratings, meaning I believe they are overvalued and can be shorted. Shares of the two are falling in recent trading Thursday.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr 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

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
SYM TRADE IT LAST %CHG
BPO $20.52 0.00%
HOT $84.84 0.00%
PHM $20.00 0.00%
RYL $43.62 0.00%
RWX $44.96 0.00%

Markets

DOW 18,285.74 +0.34 0.00%
S&P 500 2,130.82 +4.97 0.23%
NASDAQ 5,090.7940 +19.0510 0.38%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs