Homebuilders Are Risky Bets Despite Positive Data
Forecast 1-Year Return: Stocks with a red number are projected to decline by that percentage over the next twelve months. Stocks with a black number in the table are projected to move higher by that percentage over the next twelve months.
Value Level: The price at which to enter a GTC limit order to buy on weakness. The letters mean; W-weekly, M-monthly, Q-quarterly, S-semiannual and A-annual.
Pivot: A level between a value level and risky level that should be a magnet during the time frame noted.
Risky Level: is the price at which to enter a GTC limit order to sell on strength.D R Horton (DHI) ($19.58 vs. $21.41 on Oct. 25): Since Oct. 25 buy-and-trade investors could have sold versus my monthly pivot at $21.35 then buy on weakness to my quarterly value level, now a pivot at $18.11. Hovnanian (HOV) ($5.49 vs. $4.44 on Oct. 25): -- After a gain of 325.6% over the last 12 months it is time to book profits against my weekly risky level at $5.71. KB Home (KBH) ($14.61 vs. $16.72 on Oct. 25): Has been upgraded to buy from hold since that Oct. 25 post. After a gain of 120.7% over the last 12 months consider booking profits on strength to my weekly pivot at $16.41. Lennar (LEN) ($38.72 vs. $38.20 on Oct. 25): Lennar is 56.8% overvalued and up 136.8% over the last 12 months with a price-to-earnings ratio of 39.6, which are reasons enough to book profits. Pulte Group (PHM) ($17.11 vs. $17.45 on Oct. 25): Pulte gained 227.8% over the last 12 months with a P/E of 32.6, so it's time to book profits. Ryland Group (RYL) ($33.72 vs. $32.79 on Oct. 25): Since Oct. 25 buy-and-trade investors could have sold versus my weekly risky level at $35.30 then buy on weakness to my monthly value level at $30.37. Ryland's P/E is the most elevated at 74.7.
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