There are some people who call themselves "contrarians" who point out how cheap and undervalued the homebuilders are. They are right, but they are going to get a lot cheaper. They drank as much of the Kool-Aid as everyone else during the subprime party. Get out now.
For long-term value investors, BZH is a bargain at these prices... there is always the risk of bankrupcy, but I'd weigh that risk against the nice return that is possible from these levels
A week ago, the Beazer Homes (NYSE: BZH) Exec VP & CFO resigned effective immediately . Now the news breaks, apparently from Business Week, that the company is being investigated for mortgage fraud. The stock is down -12 pct after-hours to $27.65 (and falling).
Although this is a bit painful, (how the heck was I sooo wrong?) in the interest of accountability, here is a review of a call on housing and home-builders stocks from last summer.
Beazer (BZH) which I featured sitting right at support at $27.50, sliced through it without any hesitation. This is what stop losses were made for! Obviously not every trade will make you money. If you value discipline over conviction, you’ll live to play another day.
Since I mentioned the National Association of Home Builders (NAHB) Housing Market Index, I thought I’d take a look at a long term chart of this indi
Monday: Economic Construction (-0.8%), ISM (42.0) Earnings Allegheny Energy (AYE), DryShips (DRYS), Goodyear (GT), Oshkosh (OSK), Anadarko (APC), Auto Data (ADP), Herbalife (HLF), MasterCard (MA), Mohawk (MHK), Open Text (OTEX), Otter Tail (OTTR), Rock Tenn (RKT), Pitney (PBI), Principal Fin (PFG), Viacom (VIA.B)
Tuesday: Economic Truck / Auto, Factory Orders (-1.5%) Earnings Archer D (ADM), Emerson (EMR), FirstEnergy (FE), Graftech (GTI), Jacobs (JEC), Marvel (MVL), Rowan (RDC), RTI (RTI), Vornado (VNO), West Pharma (WST), Blue Nile (NILE), Kendle (KNDL), Ultra Petrol (UPL), Weight Watchers (WT...
Upscale U.S. homebuilder Beazer Homes USA (BZH) reported third quarter (ended June) earnings of -$2.85 per share, missing the Zacks consensus estimate of -$2.66 per share by around 7 percent. Thus far in today's trading, however, BZH shares are up 28 cents, or around 4.7 percent.
This is likely because of the silver lining that comes attached with the earnings miss: a year ago, Beazer reported a loss of -$3.09 per share. Also, much of the loss was due to a $95.5 million charge relating to the company backing away from new land option contracts. So the perception could be that homebuilders
Home Builders Take Another Knock
- To claim that home builders have had a tough year would be somewhat of an understatement. As evidence of this, released today was data on new home sal...
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About Beazer Homes USA Inc.
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