NEW YORK (TheStreet) -- Shares of D.R. Horton (DHI) finished the day in the red, down by 0.22% to $26.65 on heavy volume on Monday afternoon, as the home builder seemed to miss out on the rally enjoyed by its peers.
Some home builders were jumping today thanks to data from the National Association of Home Builders/Wells Fargo, which showed confidence among home builders spiked by five points to 59 in June, a nine-month high, MarketWatch reports.
Economists were expecting the confidence gauge to show a reading of 55.
Readings above the 50 mark indicate that home builders are encouraged by sales trends.
D.R. Horton operates by constructing and selling homes through its various operating divisions. The company can be found in 27 states in 79 markets under the names D.R. Horton, America's Builder, Express Homes, Emerald Homes, Breland Homes, Regent Homes and Crown Communities.
Separately, TheStreet Ratings team rates D R HORTON INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate D R HORTON INC (DHI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. 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, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 7.6%. Since the same quarter one year prior, revenues rose by 38.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.73, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- D R HORTON INC has improved earnings per share by 5.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, D R HORTON INC increased its bottom line by earning $1.51 versus $1.34 in the prior year. This year, the market expects an improvement in earnings ($1.87 versus $1.51).
- You can view the full analysis from the report here: DHI Ratings Report