This column was originally published on RealMoney on Aug. 4 at 9:40 a.m. EDT. It's being republished as a bonus for TheStreet.com readers.

Hovnanian

(HOV) - Get Report

reports

another bad quarter and a huge loss on cancellations and walkaways.

Hold it! Stop the presses. Hovnanian did report a "bad" quarter but instead of earning $7 a share this year it now could earn $5. That's what the new guidance is.

Mind you, I am not bullish on this group -- I won't be until the

Fed

starts easing, which it should after the fourth-in-a-row weak employment number this morning. But it is important to point out that in previous cycles the homebuilders got wrecked, had big losses and really threatened bankruptcy.

Now they just earn $5.

That's why giving up on these guys is such a mistake. They will readjust and figure things out. They were all building too many homes and it is hard to switch to building none so fast when you have started building them. You can't tear them down or blow them up.

And remember, if you bought the house and you took delivery, as opposed to just put a deposit down, you can't return it!

Don't buy these stocks. They are wrong here. Don't short them though. They seem to have found a level where the short is crowded and the long is few and far between.

At the time of publication, Cramer had no position in the stock mentioned.

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