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PulteGroup, Inc. Message Board

  • jeeree234 jeeree234 Jun 27, 2013 3:41 PM Flag

    Why Is A $25 Stock Selling For Only $19?

    At least the analysts I've read have been predicting $25. But I think new construction is more prevalent than many think so $25 may be too conservative. I base that thought on building departments comments and permits issued. Pulte is leading the pack in Michigan.

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    • All builders have sold off snce Bernanke hinted that the fed might, at some time in the future, stop buying mortgage backed securities. This caused an increase in mortgage rates, and the market panicked. My take is that public builders will do well because of backuped demand, and a lack of competition. The small private builders were squeezed out by the building bust. The expectation of increasing interest rates will have a POSITIVE effect on sales until rates peak, and the expectation will be for a future drop. This situation is a long way away, 5 to 6 years at least. Meanwhile builders are all good buys right now, the market has mispriced them

      Sentiment: Strong Buy

      • 1 Reply to stefaith
      • You are 100% correct and that is why these public builders are the best place to play the housing market. Because the small private builders have been taken out of the picture, you will see lower total starts than in the past and with that you will see higher margins and larger profits for these public builders. Suppliers will do well but not as well because the total number of starts will not hit the highs of the past just because there are not enough builders in the market.

    • So Michigan will pull PHM over the line? Michigan? When I think of a place to live and build a new home, I think Michigan?

    • IC a pump job... I see existing houses being discounted by 45% in some decent areas.

      Sentiment: Strong Sell

    • Market says under $19 and past history stock has a forward PE of 10. Expected earnings estimate for 2014 are $1.64 and stock should be around $17. Listed below were during the booming housing market before the drop. Since then the outstanding shares have in creased by 50% since 2008 from 258M to 387M.

      2003 (A) 2.46 stock high 24
      2004 (A) 3.84 stock high 32
      2005 (A) 5.47 stock high 48

      Good luck...

 
PHM
20.44-0.02(-0.10%)Aug 28 4:00 PMEDT