PHM is paying down $1 billion in long term debt as per their Q3 statement. There is no statement of increasing debt, but if I was to guess, they may be taking on some short term debt for construction financing as the number of contracts are increasing. In construction, debt will increase as the number of construction contracts and specs increase. So on the balance sheet, construction debt will increase and construction contracts (asset) will increase more. When you just look at one line item, it will appear that debt is increasing! If those people on Fast Money can't read the entire balance sheet, they should not be allowed to speak.
And on margins, a large number of homes PHM build are the low end, low margin homes. In that business sector you make your money on quantity and inventory turns! A good builder like PHM can make better total profits on these low end homes than a high end builder with great margins.
The problem is idiots get air time on CNBC while people that really know the business are left to write things on Yahoo message boards where no one really reads it.
They've missed this all the way up and obviously have no special into this company of this business. Just an opportunity to buy more at a discount. This story is just beginning and will not end until we see a normalized market in new and used homes and we have neither ... not even close. What happens is the trend traders and others chasing the housing rebound stocks .... are easily scared away .... and that's good for us. Even horrible balance sheet housing stocks like HOV are recovering ....
The future is bright since the Dems have the Whitehouse again and the Repubs have the House ..... Bernanke stays and so does the Fed's housing policy.
We're just getting started. I see Pulte topping 30 before 2014.