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

NEW YORK (TheStreet) -- Shares of D.R. Horton Inc. (DHI) are lower by 3.14% to $21.26 in mid-afternoon trading on Monday, as home builder stocks react negatively to the National Association of Realtors report that U.S. homes sales declined 1.8% in August, the Wall Street Journal reports.

One major factor resulting in the drop was that investors began to move away from the housing industry as they expressed doubts regarding the sector's strength, the Journal said.

Sales of previously owned homes dropped in August to an annual rate of 5.05 million, down 5.3% from August 2013, ending four consecutive months of gains, the Journal noted.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

The decrease in home sales showcased how fewer investors were making purchases. Investor shares of overall sales fell to 12% in August, the lowest level since late 2009, from 16% for July, the Journal added.

Other home builder stocks falling today include PulteGroup Inc. (PHM) , lower by 2.76% to $18.30, Lennar Corp. (LEN) , down by 2.39% to $40.05, and KB Home (KBH) , lower by 2.89% to $16.81.

Separately, TheStreet Ratings team rates D R HORTON INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate D R HORTON INC (DHI) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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, reasonable valuation levels and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

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