Why D.R. Horton (DHI) Stock Is Advancing Today

NEW YORK (TheStreet) -- Shares of D.R. Horton (DHI) - Get Report are rising by 4.31% to $30.50 in early afternoon trading on Tuesday, as homebuilder stocks rally due to the improvement in new home sales for the month of April.

D.R. Horton is a Fort Worth, TX-based company that acquires and develops land, as well as constructs and sells residential homes.

The Commerce Department announced on Tuesday that new home sales soared by 16.6% from the previous month to a seasonally adjusted annual rate of 619,000 units.

This is the highest level since January 2008 and the largest percent increase since 1992, Reuters reports. Analysts had estimated for 520,000 units for April.

New home sales tend to be volatile from month to month and April's rise is likely exaggerating the strength of the housing market, Reuters noted.

Separately, TheStreet Ratings has set a "buy" rating and a score of B on D.R. Horton stock. This is driven by a few notable strengths, which TheStreet Ratings believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks it covers.

The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. TheStreet Ratings feels its strengths outweigh the fact that the company shows low profit margins.

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

You can view the full analysis from the report here: DHI