NEW YORK (TheStreet) -- Shares of Hovnanian Enterprises (HOV - Get Report) are higher by 3.46% to $2.24 on Monday afternoon, as home builder stocks get a boost from the rise in sentiment for October.

The National Association of Home Builders/Wells Fargo released the builder sentiment index on Monday, which showed a reading of 64 for October, up from 61 in September, the Associated Press reports.

Any reading above 50 shows that builders view sales conditions as good.

"With firm job creation, economic growth and the release of pent up demand, we expect housing to keep moving forward as we start to close out 2015," NAHB's chief economist David Crowe told the AP.

Hovnanian Enterprises is a Red Bank, NJ-based designer, builder, marketer and seller of single family detached homes, attached townhouses and condominiums, as well as urban infill, and active adult homes in planned residential developments.

Separately, TheStreet Ratings team rates HOVNANIAN ENTRPRS INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

We rate HOVNANIAN ENTRPRS INC (HOV) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Household Durables industry. The net income has significantly decreased by 144.9% when compared to the same quarter one year ago, falling from $17.11 million to -$7.68 million.
  • The gross profit margin for HOVNANIAN ENTRPRS INC is rather low; currently it is at 18.12%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.42% trails that of the industry average.
  • Net operating cash flow has declined marginally to -$76.55 million or 4.24% when compared to the same quarter last year. Despite a decrease in cash flow of 4.24%, HOVNANIAN ENTRPRS INC is still significantly exceeding the industry average of -104.69%.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 36.16%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 145.45% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • HOVNANIAN ENTRPRS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, HOVNANIAN ENTRPRS INC increased its bottom line by earning $1.84 versus $0.20 in the prior year. For the next year, the market is expecting a contraction of 109.2% in earnings (-$0.17 versus $1.84).
  • You can view the full analysis from the report here: HOV