Join the Homebuilding Club

Analysts are starting to upgrade. Remember what happened when they downgraded.
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This column was originally published on RealMoney on Oct. 10 at 11:38 a.m. EDT. It's being republished as a bonus for TheStreet.com readers.

There's a new club being formed today: the homebuilding club. It is made up of analysts who have to upgrade because the inventories of homes have been slashed, and slashed well beyond what anyone thought possible.

D.R. Horton

(DHI) - Get Report

, for example, has cut the number of homes under construction from 16,000 to 10,500. Cost-cutting measures will yield an upside surprise, JPMorgan says in its upgrade on the stock to overweight from neutral -- to buy from hold, to put it plainly.

Toll

(TOL) - Get Report

, too. In the JPMorgan upgrade, the analyst talks about a nice comparison vs. last year. That will get things going.

Remember what happened here. When everyone at last stopped defending the group and went to sells and holds, we got the bottom, like clockwork.

I think that out of all these, I like

Lennar

(LEN) - Get Report

and then

KB Homes

(KBH) - Get Report

. The trader in me, though, wants to buy all of them and all of the companies --

Black & Decker

(BDK)

,

Sears Holdings

(SHLD)

,

Ingersoll Rand

(IR) - Get Report

,

American Standard

(ASD)

,

Fortune Brands

(FO)

-- that go with them.

At the time of publication, Cramer was long Sears Holdings and Ingersoll Rand.

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

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