Join the Homebuilding Club

Analysts are starting to upgrade. Remember what happened when they downgraded.
Publish date:

This column was originally published on RealMoney on Oct. 10 at 11:38 a.m. EDT. It's being republished as a bonus for 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.


(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


(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



Sears Holdings



Ingersoll Rand

(IR) - Get Report


American Standard



Fortune Brands


-- that go with them.

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

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