|Bid||2,477.96 x 1000|
|Ask||0.00 x 1000|
|Day's Range||2,480.56 - 2,555.12|
|52 Week Range||2,040.71 - 3,700.00|
|Beta (3Y Monthly)||0.57|
|PE Ratio (TTM)||15.15|
|Earnings Date||Jan 23, 2019 - Jan 28, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||2,793.33|
Housing stocks were at the core of the late 2018 turbulence in financial markets, mostly because the things that were killing broader markets (the threat of rate hikes and a slowing economy) are especially large headwinds for housing stocks. The SPDR S&P Homebuilders ETF (NYSEARCA:XHB) peaked in early 2018. Ever since, it has fallen 25%. But, where there's rubble, there's opportunity. Housing stocks actually look attractive here. They have been oversold on overstated concerns regarding the health of the housing market. In reality, the fundamentals underlying the housing sector aren't that bad. They are actually pretty good. Consider the following: * The U.S. consumer is healthy. Despite all the calls for a coming recession, the U.S. consumer is still relatively healthy. The unemployment rate is low. The economy is still adding hundreds of thousands of jobs every month. Labor participation rates are up. Wages are rising. Inflation is checked. Consumer confidence and sentiment are high. Retail sales were robust last holiday season. The personal savings rate is well above its 20 year average. A healthy consumer usually supports a healthy housing market. * Home prices are steadily rising. The S&P/Case-Shiller U.S. National Home Price Index is still rising at a gradual mid single-digit year-over-year rate, the same rate it has been rising at for the past three years, thus indicating that supply-demand fundamentals underneath the housing market remain healthy, stable, and favorable for homebuilders. For comparison purpose, back before the housing crisis in 2007-08, home prices went from double digit growth in 2004-2005 to low single-digit growth in 2006 and negative growth in 2007. * New houses are being built at a steady and sustainable rate. The headlines continue to scream about weak housing starts data, but in the big picture, housing starts remain on a multi-year uptrend since 2008. Granted, the pace of the growth has slowed, but the trend presently looks more like moderation in housing starts than a steep drop off in housing starts. Prior to nearly every recession in history, housing starts volume plummeted heading into the economic slowdown. * We are in a seller's market, but buyers are sticking around. The monthly supply of homes in the U.S. real estate market currently measures 7.4. That is up sharply from where the months supply has hovered over the past several years, and does indicate that we are in a seller's market (usually numbers below 5 indicate a buyer's market, while numbers above 7 indicate a seller's market). But, 7.4 months of supply is only slightly above 7. Leading into prior housing market collapses, that number has usually risen as high as at least 8, but usually 10 or higher. * Home ownership rates are low, and have room to move higher. Last quarter, the home ownership rate in the U.S. was below 65%. In the early-to-mid 2000's, the home ownership rate was closing in on 70%. Thus, today's home ownership rate is well off its highs, implying that the pool of potential buyers is still relatively large. So long as that pool remains large, and the individuals within that pool remain economically healthy, the housing market should be relatively stable. * The Fed is going dovish. The Fed was exceptionally hawkish in late 2018. Their tune has changed dramatically in early 2019. Multiple current and former Fed members have come out and voiced dovish opinions regarding a "wait-and-see" approach to rate hikes, and many have suggested that this rate hike cycle may be over. * Mortgage rates are falling. Thanks to a dovish Fed, mortgage rates across the U.S. are finally falling after consistently and sharply rising for most of the back half of 2018. The 30-Year Fixed Rate Mortgage is around 4.45% today, roughly 45 basis points lower than where it was in mid-November. Falling mortgage rates increase home affordability, and increasing affordability usually sparks demand, especially against the backdrop of low unemployment, rising wages, and a high savings rate. * 7 Stocks to Buy as the Dollar Weakens Overall, the fundamentals underlying the housing market remain strong. Valuations on housing stocks are now anemic. That combination implies a solid opportunity to buy the dip in housing stocks. InvestorPlace - Stock Market News, Stock Advice & Trading Tips ### Housing Stocks Due for a Bounce: LGI Homes (LGIH) Source: Shutterstock One housing stock that looks really good here is LGI Homes (NASDAQ:LGIH). This is a stock which has fallen 30% off its recent highs and trades at a 20% discount to its "normal" valuation (10x trailing earnings, versus 12x average trailing P/E multiple). Yet, LGI just announced record December results that run contrary to the recent 30% decline and 20% valuation discount. As such, estimates and sentiment should move higher, providing a double tailwind for the stock through higher earnings and multiple expansion. Longer term, this is a healthy homebuilder with a history of sustained growth and broad exposure to the U.S. housing sector with operations in 26 markets and 16 states. So long as the housing market remains healthy, LGIH stock should head higher from here. ### Housing Stocks Due for a Bounce: Pulte Group (PHM) Source: Shutterstock Another housing stock that has been overly beaten up is Pulte Group (NYSE:PHM). Pulte Group is big (the nation's third largest homebuilder) with healthy geographic diversity (25 states and nearly 50 major markets) and demographic diversity (30% entry-level buyers, 30% move-up buyers, 15% luxury buyers, and 25% active adult buyers). Because of this broad exposure, Pulte Group truly moves with the U.S. economy. * 10 Growth Stocks With the Future Written All Over Them As stated before, the U.S. economy is actually doing just fine right now, and projects to be just fine for the foreseeable future. PHM stock is not priced for that. Not only has it fallen 20% off recent highs, but it's also trading at under 10x trailing earnings, versus an average trailing P/E multiple of over 12. Thus, so long as the economy continues to stabilize in 2019, PHM stock should rebound. ### Housing Stocks Due for a Bounce: NVR (NVR) Source: Jan Tik via Flickr A large housing stock which looks attractive on this dip is NVR (NYSE:NVR). NVR is a big homebuilder that operates in 14 sates and 31 metropolitan areas. The company's home building operations also span multiple income demographics. As such, given broad exposure to the housing market, stabilization in housing market fundamentals through an indefinite rate hike pause should propel NVR stock higher. If that does happen, NVR stock has plenty of room to run. NVR stock has fallen 30% off its recent highs. More than that, this stock normally trades around 20x trailing earnings. Today, it trades at just 15x trailing earnings. Thus, multiple expansion through improved sentiment could send shares materially higher. ### Housing Stocks Due for a Bounce: Lennar (LEN) Source: Shutterstock One housing stock which has been really beaten up is Lennar (NYSE:LEN). Much like the other homebuilders on this list, Lennar is big with healthy geographic and demographic diversity. But, LEN stock has been chopped down worse than most of its peers. As of this writing, the stock trades nearly 40% off recent highs. * Top 10 Global Stock Ideas for 2019 From RBC Capital This compression provides a big upside opportunity in 2019. If housing market fundamentals continue to stabilize, sentiment surrounding LEN stock will improve dramatically. That will lead to huge multiple expansion. Normally, LEN stock trades around 15x trailing earnings. Today, it trades at about half that level, around 8x trailing earnings. Thus, this stock could easily almost double from here if valuation simply reverts to the norm. ### Housing Stocks Due for a Bounce: D.R. Horton (DHI) Source: -v via Flickr (modified) The number one homebuilder in America by closings volume -- D.R. Horton (NYSE:DHI) -- also looks good on this dip. The fundamentals here are good. DHI is the biggest homebuilder in America and has been so for almost two decades. The company has broad geographic and demographic diversity, and controls dominant market share in rapidly expanding metro areas like Phoenix and Dallas Fort Worth. Fiscal 2018 was a good year, with healthy sales and closing growth and 20%-plus ROI. If these fundamentals persist in 2019 -- and they should -- then DHI stock will rebound in a big way. This stock is already more than 25% off its recent highs. It is also trading at just 10x trailing earnings, versus a five-year average trailing multiple of 15. Thus, multiple expansion and stabilized EPS forecasts could drive huge gains for DHI stock in 2019. ### Housing Stocks Due for a Bounce: KB Home (KBH) Source: Shutterstock The housing stock that was hit hardest in 2018 was KB Home (NYSE:KBH). Due to deterioration it its core operating results as a result of macroeconomic headwinds, KBH stock struggled throughout 2018. But, those macroeconomic headwinds are improving, and the company just reported fourth-quarter numbers that were largely better than expected and confirm a "less bad" macroeconomic backdrop. * 7 Oversold Small-Cap Stocks With Massive Profit Growth But KBH stock isn't priced for "less bad". It's priced for "more bad". KBH has plunged nearly 50% off its January 2018 highs, and trades at just 12x trailing earnings, versus a five-year average trailing P/E multiple of 15. Estimates have also come down sharply over the past several months. Thus, through a combination of multiple expansion and higher EPS revisions, KBH stock could soar in 2019. ### Housing Stocks Due for a Bounce: Toll Brothers (TOL) Source: Shutterstock The final beaten up housing stock on this list is Toll Brothers (NYSE:TOL). Due to rising home prices and mortgage rates, Toll Brothers shocked investors in early December by reporting its first decline in new orders in 4 years. That essentially confirmed a housing market slowdown, and kept bears in control of TOL stock. But, mortgage rates are now starting to fall, and that could provide a nice lift to beaten-up TOL stock. After all, this stock trades at just 7x trailing earnings. That's super cheap, even for a housing stock. It's also well below the stock's average trailing P/E of 17. Plus, 2019 EPS estimates have come down more than 10% in the past 90 days alone, implying that next year's numbers look beatable. Overall, successive EPS beats plus multiple expansion could drive huge gains for TOL stock in 2019. As of this writing, Luke Lango was long XHB, LGIH, KBH, and TOL. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Growth Stocks With the Future Written All Over Them * 7 Reasons Why Buffett's Bet on Apple Stock Is a Good One * 10 Companies That Could Post Decelerating Profits Compare Brokers The post 7 Beaten-Up Housing Stocks Due for a Bounce Back appeared first on InvestorPlace.
NVR (NVR) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
In Robert Louis Stevenson's famous book, "Strange Case of Dr. Jekyll and Mr. Hyde," Dr. Jekyll and Mr. Hyde were one human being with a split personality. Dr. Jekyll healed people and Mr. Hyde murdered them. This economic environment and the U.S. stock market have the same kind of split personality.
It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples Read More...
# NVR Inc ### NYSE:NVR View full report here! ## Summary * Perception of the company's creditworthiness is negative * ETFs holding this stock are seeing positive inflows * Bearish sentiment is low * Economic output in this company's sector is expanding ## Bearish sentiment Short interest | Positive Short interest is extremely low for NVR with fewer than 1% of shares on loan. This could indicate that investors who seek to profit from falling equity prices are not currently targeting NVR. ## Money flow ETF/Index ownership | Positive ETF activity is positive. Over the last month, growth of ETFs holding NVR is favorable, with net inflows of $10.04 billion. This is among the highest net inflows seen over the last one-year and the rate of additional inflows appears to be increasing. ## Economic sentiment PMI by IHS Markit | Positive According to the latest IHS Markit Purchasing Managers' Index (PMI) data, output in the Consumer Goods sector is rising. The rate of growth is strong relative to the trend shown over the past year, and is accelerating. ## Credit worthiness Credit default swap | Negative The current level displays a negative indicator. NVR credit default swap spreads are at their highest levels for the past 3 years, which indicates the market's more negative perception of the company's credit worthiness. Please send all inquiries related to the report to firstname.lastname@example.org. Charts and report PDFs will only be available for 30 days after publishing. This document has been produced for information purposes only and is not to be relied upon or as construed as investment advice. To the fullest extent permitted by law, IHS Markit disclaims any responsibility or liability, whether in contract, tort (including, without limitation, negligence), equity or otherwise, for any loss or damage arising from any reliance on or the use of this material in any way. Please view the full legal disclaimer and methodology information on pages 2-3 of the full report.
After looking at NVR, Inc.'s (NYSE:NVR) latest earnings announcement (30 September 2018), I found it useful to revisit the company's performance in the past couple of years and assess this Read More...
RESTON, Va. , Dec. 12, 2018 /PRNewswire/ -- NVR, Inc. (NYSE: NVR) announced today that its Board of Directors has authorized the repurchase of $300 million of its outstanding common stock. The purchases ...
A market correction in the fourth quarter, spurred by a number of global macroeconomic concerns and rising interest rates ended up having a negative impact on the markets and many hedge funds as a result. The stocks of smaller companies were especially hard hit during this time as investors fled to investments seen as being […]
This article is written for those who want to get better at using price to earnings ratios (P/E ratios). We'll show how you can use NVR Inc's (NYSE:NVR) P/E ratio Read More...
Higher revenues and pricing help Toll Brothers (TOL) post better-than-expected earnings in the fiscal fourth quarter. Yet, rising input costs along with ongoing housing market headwinds pose risks.
RESTON, Va. , Dec. 3, 2018 /PRNewswire/ -- NVR, Inc. (NYSE: NVR) announced that Alexandra A. Jung has been appointed to its Board of Directors as an independent director effective December 3, 2018 . Ms. ...
Lack of competition in the luxury new home market and robust backlog are likely to boost Toll Brothers' (TOL) fiscal Q4 results. However, rising input costs are likely to compress its margins.
The operating backdrop remains tough for homebuilders given rising mortgage rates, higher construction costs, shortage of skilled labor and a dearth of buildable lots.
NVR (NVR) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.
Paul Saville became the CEO of NVR Inc (NYSE:NVR) in 2005. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap Read More...
The nation’s largest 3,000 public companies suffered a net loss of $2.1 trillion between Sept. 30 and Oct. 24, according to a Business Journals analysis of Bloomberg data. The likes of Danaher, Lockheed, Marriott and CoStar took hits.
The constant strain of the Sino-U.S. trade relationship brought Chinese stocks to their knees in 2018 – the latest wave of selling sending mainland Shanghai Composite Index to levels not seen since November 2014. Volatility-tied products are under pressure again as wild price swings have returned to the markets. U.S. homebuilders are going through rough times with disappointing numbers in building permits and housing starts. Rising funding costs are a major problem for indebted corporations, especially as U.S. companies' debt load reached record levels of $6.3 trillion. Closing the list, FAANGs have a wall of worries to climb with Netflix hoping to lead the way up with surging revenue and subscriber adds. Check out our previous Trends edition at Major Stock Indices Feel The Pain of Multi-Year High Rates.
Most people tend to see what's right in front of them, especially when it comes to housing affordability. Consider that most of the media organizations in the U.S. reside in the expensive coastal cities. An examination of the laws of supply and demand are essential to this discussion, as well as a review of human behavior in markets based on affordability.
The ratings on six P&I classes were affirmed because the transaction's key metrics, including Moody's loan-to-value (LTV) ratio, Moody's stressed debt service coverage ratio (DSCR) and the transaction's Herfindahl Index (Herf), are within acceptable ranges. The performance expectations for a given variable indicate Moody's forward-looking view of the likely range of performance over the medium term. Performance that falls outside the given range can indicate that the collateral's credit quality is stronger or weaker than Moody's had previously expected.
Even if NVR sees a decline in sales and margins over the next few quarters, the recent price drop and its current valuation still make this stock look attractive.