Can anyone explain why Homebuilders are up over 100% in a year, while new home sales are up 8%? Class, anyone? Anyone?
The MBA reported Wednesday that its widely watched measure of home loan refinances, the MBA refinance index, fell 24.2 percent to 1783.0 in the March 8 week. Also, refinancings have fallen 21 percent from a year ago.
At the same time, the industry trade group's measure of demand for applications to buy a home, the MBA purchase index, fell 6.2 percent to 314.6. While they were off in the latest week, applications to buy homes were up 8 percent from a year ago.
Actually i want to ask another question:
Why BZH is up 100% from the last February, when new residentual orders for the first 2 months of this year are flat: 1909 untis in 2002 vs 1907 units in 2001. I have to exclude governmental programms and Sanford.
I also have another question: why the number of completed unsold houses went up 17% in Dec quarter?
And another one: why is their average selling price have been falling steadily?
How good is it going to be that BZH is going to borrow over 200 mln to buy Crossman which new orders have already fallen whooping 40% from the last year?
It's going to be very interesting to see how BZH manages Crossman's inventory overhang?
Also, it is very interesting to see what will Crossman's shareholders do with the 3.6 mln shares of BZH they get?
Will they hold them or dump them, being happy that they got a huge premium for their "great" company?
so much for small float.
That is an easy question. The stock prices were very depressed a year ago because investors thought housing would decline (as it normally does ) during the recession. This pushed P/Es down to the 5-6x earnings. Instead of a slowdown, housing grew stronger resulting in stronger profits (30%-50%). An 8% increase in sales translated into much greater increase in Net Profits because operating margins expanded - both due to higher sales prices and the spreading of fixed cost over a larger sales base. The stock price had to go up - just to keep the industry p/e multiple constant. As evidence of housing's resistance to the mild recession mounted, the P/E has expanded slightly to (8-10x).
I feel the housing industry p/e could expand quite a bit more to the 14-16x range. This would still put it below many industries that were much more sensitive to the economic slowdown.
<<<The stock prices were very depressed a year ago because investors thought housing would decline>>>
Please show me exactly where the prices were depressed a year ago?
<<<What's the difference, if your short, you will be short 3 times as many shares>>>
Your point being?
Guru, are you here for the split? Is that why you are holding BZH?
Are you here because of the short interest?
I don't get it? Are you investing in a company and its future prospects or are you speculating that it would go up because of some fundamentally neutral event?
Are you a day-trader?
Day trading is fine. I've no problem with it whatsoever. I day-trade myself, when I see an opportunity.
Anyway, enjoy the ride down.
<<<According to Value Line BZH was trading for
under $40 last March. Their info is usually
Not a short, lay off me already, would you?
BZH's warnings were half of what they are now so their P/E was the same as now. In other words their P/E has never been 4-5 as you are trying to say. The stock price has never been depressed. All of the homebuilders vaulted up due to EXTRAORDINARY confluence of curcumstanses: lowest interest rates in 60 years, record fast rate reduction, tax rebate, low energy prices, hystorically low unemployment, low building material prices, unusually warm weather, absence of real recession, absence of inflation, willingness of consumers to take on huge debt, nesting instict in the wake of 9/11, interest free car financing, absence of competing investments (fixed income vehicles, stock market equities)
Say goodbuy to them.
Use an analogy: record capital investing before Y2K, relaxation of the margin rules, FED pooring liquidity, the longest postwar economic expansion, investors willing to assume the highest margin interest in hystory, the lowest unemployment rate in hystory, venture capital at all time high, nation wide love for stocks --- result, tremendous spike in equity prices. Final result --- second longest and second deepest bear market in the history of the USA equity markets. The gains of 1997, 1998, 1999, 3/2000 were erazed COMPLETELY.
Homebuilders had a bull market of their own due to EXTRAORDINARY synergy of factors. Final results are remained to be seen. I'll cover BZH at $40.
be ugly. BZH is testing 50 day MA and it should bounce on the first try. But to me it is just a matter of time not an if, till it fails to bounce and then there is no stoping till $70.
<<<BZH is in the starter home market here in Vegas, with prices around 130 to 150. BZH homes are considered the best value>>>
And since their average selling price is 197k it would seem they are selling them in Vegas at a loss. Hah, hah.
And since Vegas gaiming industry is screwed, with other states relaxing gaiming restrictions, it seems that Vegas housing market is screwed as well.