DR Horton Inc (DHI): Today's Featured Materials & Construction Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model

DR Horton ( DHI) pushed the Materials & Construction industry lower today making it today's featured Materials & Construction laggard. The industry as a whole closed the day down 0.7%. By the end of trading, DR Horton fell $0.66 (-3.0%) to $21.48 on average volume. Throughout the day, 5,287,610 shares of DR Horton exchanged hands as compared to its average daily volume of 6,067,400 shares. The stock ranged in price between $21.24-$22.14 after having opened the day at $22.10 as compared to the previous trading day's close of $22.14. Other companies within the Materials & Construction industry that declined today were: MagneGas Corporation ( MNGA), down 10.6%, Ryland Group ( RYL), down 6.0%, Veolia Environnement ( VE), down 4.8% and Tri-Tech ( TRIT), down 4.4%.
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D.R. Horton, Inc. operates as a homebuilding company. The company engages in the acquisition and development of land; and construction and sale of residential homes in 26 states and 77 markets in the United States primarily under the D.R. Horton, America's Builder name. DR Horton has a market cap of $7.2 billion and is part of the industrial goods sector. The company has a P/E ratio of 7.8, below the S&P 500 P/E ratio of 17.7. Shares are up 11.9% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates DR Horton as a buy. 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, notable return on equity, solid stock price performance and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

On the positive front, Integrated Electrical Services ( IESC), down 11.1%, Universal Forest Products ( UFPI), down 8.5%, China Advanced Construction Materials Group ( CADC), down 7.3% and Argan ( AGX), down 4.8% , were all gainers within the materials & construction industry with Plum Creek Timber ( PCL) being today's featured materials & construction industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the materials & construction industry could consider SPDR S&P Homebuilders ETF ( XHB) while those bearish on the materials & construction industry could consider ProShares Short Basic Materials Fd ( SBM).

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