|Bid||42.47 x 900|
|Ask||42.48 x 1100|
|Day's Range||42.38 - 42.72|
|52 Week Range||28.25 - 42.76|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||1.15|
|Expense Ratio (net)||0.42%|
The U.S. housing market has been on a tear this year primarily attributable to a decline in mortgage rates, slower home price growth and a slew of upbeat data.
Permits to build new homes rose 8% to a seasonally-adjusted annual pace of 1.42 million, the fastest pace since 2007.
Last year, rising interest rates and low affordability put a thorn in the side of homebuilders and the real estate sector in general. This is lowering mortgage rates and enticing prospective buyers to reconsider a real estate purchase. “Unfortunately, much of the lower interest rate environment can be attributed to global economic uncertainties, which appear to have dampened consumer sentiment regarding the direction of the economy,” said Doug Duncan, chief economist at Fannie Mae.
August witnesses fluctuations in the US-China trade tensions, a gold surge, still-decent U.S. economic data points and maximum chances of a no-deal Brexit. These factors bring a few ETFs in focus.
To understand how much respect Home Depot (NYSE:HD) gets from the market, just look at the price of Home Depot stock. The stock gained last week; in fact, it touched an all-time high before a recent, modest pullback.Source: Helen89 / Shutterstock.com Those gains came after the company missed Wall Street revenue estimates and lowered its full-year same-store sales guidance.In this market, that combination for any stock -- let alone one with macro and tariff concerns -- would have sent investors fleeing for the exits. Instead, the HD stock price actually rose more than 4% after the earnings release.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThere's a case that, at this point, Home Depot has earned the benefit of the doubt. It's a great American retailer, with a likely $110 billion in sales this year. Home Depot stock has been one of the best stocks in the entire market. Valuation concerns in the past -- and I've raised them as recently as April -- have proven to be short-sighted.That said, investors are giving Home Depot an awful lot of credit. In fact, they're treating HD stock like a defensive play, not a cyclical one. That seems risky in this environment, and suggests that maybe this time, the HD stock price finally has gone too far. Home Depot Stock Rises on a Guidance CutTo be sure, Home Depot's Q2 report wasn't a disaster by any means. Earnings beat consensus by 9 cents. Same-store sales still increased 3%, including a 3.1% print in the U.S. The consolidated 3% gain was just 0.2 points below analyst estimates. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond And the general take on the quarter seems to be, as one analyst put it, that it "was no worse than feared". Even with modest signs of a housing slowdown (particularly in new construction) and potential impacts from the U.S.-China trade war, Home Depot is still growing sales and keeping operating margins basically flat. The lower revenue outlook is coming in part from deflationary prices in lumber (although tariffs are a factor as well).That said, the HD stock price doesn't seem to incorporate "no worse than feared". A 20x+ multiple to updated fiscal 2020 (ending January) guidance doesn't sound that high. But this is a cyclical stock -- one whose sales and profits will plunge in a recession.Even that aside, the lower guidance is a concern. In late 2017, Home Depot gave a three-year target for comp growth of 4.5-6% -- it's missing that mark. Margins are nearing the low end of the company's target range. Earnings-per-share rose less than 4% year-over-year: pre-tax income actually declined.Investors are clearly betting on a stronger second half. But the issue here is that Home Depot can't drive that improvement all on its own. The Concerns About the HD Stock PriceAfter all, Home Depot needs help. It needs the economy to hold up. In many places elsewhere in the market, investors hardly seem confident on that front.Admittedly, the iShares U.S. Home Construction ETF (BATS:ITB), my pick for the Best ETF of 2019, has gained 33% so far this year. But those gains have come simply from regaining some of its lost ground.ITB is up only 5% over the past year and still sits ~13% below January 2018 highs. And it's not like Home Depot stock -- a major component of that ETF -- hasn't joined in on the 2019 fun. It has risen 27% despite better performance heading into this year.Meanwhile, other macro-sensitive stocks -- think Caterpillar (NYSE:CAT) or automotive stocks -- have struggled and/or seen big sell-offs amid tariff and trade war worries. Home Depot's U.S. focus gives it exposure to the still-strong U.S. economy, admittedly, but on the whole investors still see at least some kind of downturn coming in the next few years.That's one big risk. The other is competition. Lowe's (NYSE:LOW) is trying to execute a turnaround and it's having some success. Its stock soared after earnings. Its same-store sales have outpaced those of Home Depot for the last two quarters. Home Depot isn't losing its crown any time soon, to be sure, but a combination of a weaker market and lower market share -- even if both impacts are modest -- is not priced in at 20x+ FY20 EPS. A Cyclical Treated Like a DefensiveAnd yet the HD stock price keeps marching higher. What's interesting about the trading -- particularly this year -- is that Home Depot stock really hasn't been rattled much by outside forces. It posted some big declines in 2018, but the biggest dip so far this year came from late April through late May, when the stock dropped about 9%. * 7 Stocks to Buy Down 10% in the Past Week That's a surprise given the fact that the market as a whole has, at times, been seized by selling amid tariff concerns or an inverted yield curve. A cyclical play like HD stock theoretically should be vulnerable to those swings, but it simply hasn't had much in the way of downside.Instead, Home Depot stock has traded more like a defensive stock. Its chart looks much more like that of Microsoft (NASDAQ:MSFT) or a Procter & Gamble (NYSE:PG). Those stocks aren't immune to macro worries, but they're generally considered "safer" plays for investors worried about overall growth.It certainly seems like, particularly after last week's earnings, the market is treating Home Depot stock the same way. But that would be a mistake. If a recession hits, Home Depot sales will fall. And so will the HD stock price. Investors ignore outside worries -- and guidance cuts -- at their peril.As of this writing, Vince Martin did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Tech Industry Dividend Stocks for Growth and Income * 7 Stocks the Insiders Are Buying on Sale * 7 of the Worst Stocks on Wall Street The post Home Depot Stock Might Be Getting Too Much Respect appeared first on InvestorPlace.
Here is a look at the 25 best and 25 worst ETFs from the past trading month. Traders can use this list to find prospective candidates that have deviated too far from their longer-term trends, thereby serving as potential starting points for those looking to take on either short or long positions. Likewise, traders can also use this list to spot potential trend reversal opportunities that may offer a generous risk/reward. As always, investors of all experience levels are advised to use stop-loss orders and practice disciplined profit-taking techniques. To get access to all ETFdb.com premium content, sign up for a free 14-day trial to ETFdb.com Pro.
National home prices are beginning to taper off, but low mortgage rates could give the housing sector a boost, which could shore up homebuilder exchange-traded funds (ETFs). Home prices were higher in ...
This article was originally published on ETFTrends.com. Homebuilder exchange-traded funds (ETFs) could be on the verge of a breakout. As such, ETFs to watch moving forward include the the iShares US Home Construction ETF (ITB) and SPDR S&P Homebuilders ETF (XHB) . From a technical perspective, things are also looking on the up and up.
Decent housing data and lower interest rates are helping homebuilder ETFs, such as the SPDR S&P Homebuilders ETF (NYSEArca: XHB) and the iShares U.S. Home Construction ETF (NYSEArca: ITB), rally this year. ...
The numbers: Construction on new houses fell 4% in July to the second-lowest rate this year, but builders applied for more permits in a positive sign for the housing market. Economists polled by MarketWatch had anticipated a 1.25 million rate for starts. Permits to build additional properties increased 8.4% to a seasonally-adjusted annual pace of 1.336 million from June’s revised rate of 1.232 million.
Home builder confidence increased by a single point to 66 in August, according to the National Association of Home Builders' monthly index released Thursday. Readings above 50 on the index are a sign that confidence has improved, but sentiment still remains below the levels seen a year ago. The index components that measure current sales conditions and buyer traffic both increased two points, to 73 and 50. However, the gauge of expectations for sales conditions over the next six months fell by one point to 70, suggesting that builders may be growing more concerned about the housing market's future. Two ETFs that track the home construction industry, and , took different trajectories in morning trading Thursday but are both up year-to-date.
ETFs to gain from upbeat U.S. consumers' economic outlook on a decent job market, contained inflation, rising wages and prospects of low interest rates.
D.R. Horton beats overall while many other homebuilding companies come up with upbeat results. This along with likely Fed rate cut bode well for housing ETFs.
U.S. existing home sales for June was under pressure while new home sales showed some improvement. Despite this, home building ETFs have been on a tear on upbeat corporate earnings and chances of a Fed rate cut in the near term.
Equipment manufacturer Caterpillar disappointed with its second-quarter earnings on Wednesday, citing the U.S.-China trade wars as the primary reason for higher costs affecting the company’s bottom line. ...
Homebuilder ETFs can help investors gain exposure to the shifting trends in the housing market as more homeowners opt to reinvest back into their homes. Millennials have told us through our research, ‘We ...
Sentiment among residential construction firms rose slightly in July as somewhat more favorable conditions emerged in the housing market.
The Trump administration's policies of increased tariffs on steel, aluminum and Canadian lumber as well as tougher immigration rules (especially pertaining to Mexico) could hurt homebuilding ETFs.
The strengthening homebuilder sector exchange traded funds could hit a snag as slowing home sales and a tight labor market weigh on the industry in the second half of the year. The boon of low rates “has been apparent in the strong mortgage demand data and will in all-likelihood be reflected in improving home sales data this summer,” Alex Pettee, president and director of research at investment advisory Hoya Capital Real Estate, told the WSJ.