The Zacks Analyst Blog Highlights: Freddie Mac, M/I Homes, Universal Forest Products and Watsco - Press Releases
For Immediate Release
Chicago, IL – April 28, 2015 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Freddie Mac (FMCC), M/I Homes, Inc. (MHO), Universal Forest Products Inc. (UFPI) and Watsco Inc. (WSO).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Monday’s Analyst Blog:
Is the Housing Recovery Slipping? 3 Great Picks
New home sales numbers for the month of March released last week are the lowest recorded in four months. This is in sharp contrast to the seven-year high achieved in February. At first glance, this may indicate that there is cause for concern. However, other sectoral indicators released through the month provide a more nuanced picture of the housing recovery.
New Home Sales Slide
Sales of new single-family houses declined 11.4% decline in March to 481,000. This compares unfavorably to the consensus estimate that sales would decrease to 512,000. The decline in new home sales was the largest since Jul 2013. Also, median price for new homes slipped 1.7% on a year-over-year basis.
The report serves to emphasize the hurdles that the housing sector is facing. Supply constraints and tough lending conditions are among the problems which housing may continue to face in the year ahead. At the same time, March data represents a 17.4% year-over-year increase. Significantly, numbers for February were revised upward to 543,000 from 539,000 units.
Existing Home Sales, Homebuilder Confidence Jump
New home sales are believed to be a better and more prompt indicator of the housing sector. However, other reports released this month indicate that the housing recovery remains on track. Existing home sales increased 6.1% to 5.19 million in March. This was the highest level recorded since Sep 2013 and higher than the consensus estimate of 5.03 million.
Even more significant was the rise in homebuilders’ confidence. The National Association of Home Builders (NAHB)/Wells Fargo housing market index (HMI), rose four points to 56 in April. This is the highest reading recorded till now this year. The increase in the index clearly indicates rising optimism among builders about strengthening housing momentum as the year progresses.
Key Sectoral Positives
The resurgence in the job market and low mortgage rates are the key factors which are continuing to support the housing recovery. Softer mortgage rates are reducing the cost of homes for a considerable number of households. According to Freddie Mac’s (FMCC) Primary Mortgage Market Survey, for the week ended April 16, the 30-year fixed-rate average was at 3.67%. In February, the rate was at 3.59%, the softest in nearly two years.
Among the most recent evidence of a buoyant job market was last week’s jobless claims numbers. Initial claims moved up 1,000 to 295,000 for the week ended April 18. Claims have now come in below the 300,000 mark for seven consecutive weeks.
Our Choices
Below we present three stocks poised to gain from the ongoing housing recovery. Additionally, with our new style score system we have identified the key statistics to pay close attention to and thus which stocks might be the best for value investors in the near term. The Value Style Score condenses all valuation metrics into one actionable score that helps investors steer clear of ‘value traps’ and identify stocks that are truly trading at a discount.
Our research shows that, stocks with Style Scores of ‘A’ or ‘B’ when combined with a Zacks Rank #1 or #2, offer the best upside potential. Based upon the above criteria, we have selected three stocks. Not only do these stocks have a favorable Zacks Rank but also a value score of ‘A’ or ‘B.’
M/I Homes, Inc. (MHO) is one of the nation's leading builders of single-family homes. Their homes are marketed and sold under the trade names M/I Homes and Showcase Homes.
M/I Homes holds a Zacks Rank #2 (Buy) and has a Value Style Score of ‘B.’ The company has expected earnings growth of 24.6% for the current year. The forward price-to-earnings ratio (P/E) for the current financial year (F1) is 14.13.
Universal Forest Products Inc. (UFPI) engineers, manufactures, treats, distributes and installs lumber, composite wood, plastic and other building products.
Apart from a Zacks Rank #2 (Buy), Universal Forest Products has a Value Style Score of ‘B.’ The company has expected earnings growth of 22.3% for the current year and has a P/E (F1) of 16.00x.
Watsco Inc. (WSO) is the largest distributor of heating, ventilation and air conditioning equipment in the U.S. It distributes both residential and commercial air conditioners and parts.
Watsco holds a Zacks Rank #2 (Buy) and has a Value Style Score of ‘B.’ The company has expected earnings growth of 18.8% for the current year and has a P/E (F1) of 24.19x.
There is no denying that factors like lack of wage growth and supply constraints are impeding the housing sector. But the sector’s prospects for the year continue to be bright. This is why these stocks would make prudent additions to your portfolio.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
FREDDIE MAC (FMCC): Free Stock Analysis Report
M/I HOMES INC (MHO): Free Stock Analysis Report
UNIVL FST PRODS (UFPI): Free Stock Analysis Report
WATSCO INC (WSO): Free Stock Analysis Report
To read this article on Zacks.com click here.
