on the long side, Jim Cramer advised on TheStreet.com 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 TheStreet.com's new fantasy stock-trading game, "
Beat the Street," he said he would be long
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."
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