Skip to main content TV Recap: Homebuilder Heads-Up

Avoid D.R. Horton, Pulte Homes and Lennar, Cramer says.

Don't touch

D.R. Horton

(DHI) - Get D.R. Horton, Inc. Report


Pulte Homes

(PHM) - Get PulteGroup, Inc. Report

or even


(LEN) - Get Lennar Corporation Class A Report

on the long side, Jim Cramer advised on TV's Wall Street Confidential

Web video Tuesday.

D.R. Horton decided it wanted to be the world's largest homebuilder "at the absolute worst time," he told Gregg Greenberg, the host of Wall Street Confidential.

It bought "a gigantic amount of property" to capitalize on what it thought was "endless demand," Cramer said. Also, D.R. Horton is the one homebuilder that has least written down its property, he added.

D.R. Horton, Cramer said, "is the most dangerous homebuilder." For's new fantasy stock-trading game, "

Beat the Street," he said he would be long

TheStreet Recommends



and short D.R. Horton.

Cramer praised Credit Suisse's Ivy Zelman's note about the homebuilders, "Shuffling the Deck During Uncertainty," in which she downgraded Pulte and Horton and upgraded Centex.

The problem with the homebuilders, he said, "is that while the rigor of the writedowns is clearly there, all the price targets are still way too high." Moreover, Cramer said he believes the group "is so vulnerable for another leg down."

"I hate stocks where the book value looks like where the stock is," he said. "There's a lot of book in Horton and Pulte Homes. It should be written down."

Until it is written down, Cramer said market-players "cannot touch these stocks on the long side, because you will be shocked by the writedown, and everybody's going to blow them out."

Jim Cramer is a director and co-founder of He contributes daily market commentary for's sites and serves as an adviser to the company's CEO. Outside contributing columnists for and, 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

Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. Click

here to order Cramer's latest book, "Mad Money: Watch TV, Get Rich," click

here to order his book, "Real Money: Sane Investing in an Insane World," click

here to get his second book, "You Got Screwed!" and click

here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by

clicking here. has a revenue-sharing relationship with Traders' Library under which it receives a portion of the revenue from Traders' Library purchases by customers directed there from