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Homebuilders Vulnerable in Current Market

Ryland Group (RYL - Get Report) is rated a Buy (4-Engine) according to ValuEngine, with 11.7% upside over the next 12 months or so. My quarterly value level is $10.49 with monthly risky level at $26.49.

Standard & Pacific (SPF) is rated a Buy (4-Engine) according to ValuEngine, with 7.5% upside potential over the next 12 months. My semiannual value level is $3.00 with my monthly risky level at 5.81.

Toll Brothers (TOL - Get Report) is rated a Buy (4-Engine) according to ValuEngine, with 8.1% upside over the next 12 months or so. My quarterly value level is $18.69 with an annual risky level at $29.30.

Conclusion

I continue to believe that you cannot have a job-creating economic recovery without participation from the market for new homes.

With the Federal Reserve describing the housing sector as "depressed" it is not contributing the 17% of economic growth as it did in almost all post-WWII recoveries.

The Federal Reserve has provided numerous credit facilities to bail out Wall Street and the regional banks, but it is unwilling to provide a mortgage facility for community banks and homebuilders on Main Street. Without help, the homebuilder stocks are vulnerable.

At the time of publication, the author held no shares of stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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SYM TRADE IT LAST %CHG
BZH $18.74 0.00%
DHI $26.90 0.00%
HOV $3.11 0.00%
RYL $43.62 0.00%
TOL $37.75 0.00%

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S&P 500 2,130.82 +4.97 0.23%
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