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PulteGroup, Inc. Message Board

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  • johnmg47 johnmg47 Sep 21, 2012 2:17 PM Flag

    Here's the thing,

    All true. And at this point, PHM and KBH are the top two performing builders of the last 3 months. Pulte is going to put up even better numbers than KB because it's got more lots and more diversity and it's got Del Webb, which is a cash cow. But I still think KB is more undervalued and deserves the same kind of price appreciation that PHM has had, which would put KB at $20 pronto. I just wish I knew what they plan to do about their debt (KB)? We've chased off the shorts today. Now, how do we keep them away?

    Sentiment: Strong Buy

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    • We have some housing data coming out next week, I think it is pending home sales and Case-Shiller. Those number should come in good and will keep the shorts from piling on.

      I don't know about KBH's debt as their balance sheet just released shows a build in long term debt. But it is clear after today that the market is not concerned about it and they are using the money to make money. If you go to the Bloomberg site, you can get the current financial statement and balance sheet to review.

      At this point I have to agree with you that KBH is headed to $20 and PHM will hit $22 after earnings.

      • 2 Replies to w999surf
      • For these guys right now, they are hitting on all cylinders. Because of the inventory situation, it's like shooting fish in a barrel. There's two, maybe three weeks of inventory in the SF Bay Area, one of KB's largest markets. That's nuts. Someone from Redfin recently wrote an article about home sales here, "Blink and it's Gone" was the title. A home down the street from me - a short sale - went on the market for $639K last week. Their were mulitple offers the first 5 days.

        The only concern that's left is how KB will eventually deleverage down to a 1:1 ratio for cash:LT debt.

        I put my notes on the KB board regarding their conference call. See what you think. Also, remember that terrible settlement KB had with JP Morgan over that land in Las Vegas (-$256ML)? They broke ground on the homes in early summer and have already sold 50 of them. Only 1,500 to go!

      • Why 22? Nothing I see on the chart points technically to that number?

18.57-0.52(-2.72%)Oct 25 4:01 PMEDT