Well, when I told you to get out when it hit 18, you called me names. Who is the idiot now? There is very few buyers and the volume is just not going to be good (not saying the price won't go up, just the banks are making it difficult).. Inflation is kicking in big time so the home price will stay afloat because sellers will just not sell.
We're on our way. It's not gonna not happen (that's a double negative there). It's healthy for this company's stock. Hold onto your shares. Weak holders will sell us down to $16, and once they are flushed, we can enjoy the (upward) ride.
Analyst grading is next to meaningless. I think p/e triggers most re-gradings, so if a stock's price dives, it becomes a "buy" because its p/e ratio makes it look cheap according to trivial analysis. If it breaks out and surges higher, it gets downgraded to "hold" based on "valuation," because p/e has exceeded some artificial threshold. Price to earnings is calculated based on past earnings, whereas stock price is determined by the market's expectation of future earnings.
"The Street" upgraded KBH from "Hold" to "Buy" yesterday, but the stock went down more after a big drop the day before. Is it a contrarian indicator? What a joke!
Why indeed? Tech stocks are overpriced, a lot of them. How would you like to be owning some AMZN tonight? I am betting on the proven strength of the American housing market. KBH has some interesting fundamentals. It's not a leader in profitability, but it's priced pretty good for the earnings it does earn. I think Facebook ("Mom-book") is going to be a here-today/gone-tomorrow story. Not so housing. Everyone needs a house. Nobody needs Facebook.
Why would one continue to own this stock (or any home builder) when stocks like Gilead and Facebook are going through the roof?
Not to mention, we just announced earnings. DHI's bad news is not necessarily our bad news. We've got almost 3 months for things to turn around and tell a good story at Q3 earnings time. Don't panic. I'm not panicking. Anyone in for the long term can ride this out. Sixteen is the bottom. I'm betting on that.
Idiot,, told you to get out. Don't cry now. Housing won't fully recover unless the greedy banks are willing to lend. I have client making 6 figure with 805 FICO and got rejected from CHASE because the rate is so low, greedy banks rather put money in stock market.
Pretty bad numbers for housing in general, but look what DHI is doing. They are the ones bringing us down in serious volume. I still maintain this is a good thing, long term. The sooner we take out $16, the sooner we can start moving up in a serious way. All this retail trader bouncing around between $17 and $19 is getting us nowhere. Hold tight, I say. We could be looking at $25 in a couple of years.
If KBH holds the 200 day @17.47 as it did yesterday, i think it'll go higher. We also have a good chance to see a golden cross soon as well. this assuming the market in general just doesn't deteriorate.
I really think it's just doing what the chart says it was going to do. On a 2-year chart with 50-day and 200-day simple moving averages, look at August 2012 through May 2013. The price almost always rode abve its 50-day moving average. Lately, not so much. It doesn't seem inclined to violate $16. Maybe there is a lot of short covering at that price.
I still think KBH has good upside potential if someone held their cash until it gets down to $16. So many people got burned in May 2013 above $19, though. They want out at $19 or better, and the supply of shares they want to sell is going to be a drag. What we need is a good hard dip to get these people to panic sell. If we head fast towrd $16 and these people think it's going to $12, they will dump shares, the shorts will start taking profits, and we have a good chance of seeing $24 again.
Really, for a long term investor such as I am, it's all rationalization and not minute-by-minute decisioin making. I've got a day job, and I can't spend all my time on this.