03/22/2016
The averages shrugged off sliding existing home sales data as DJIA gained 20 points (0.1%), to 17,622, logging its seventh straight day of gains – its longest winning streak since October 2015. Consumers seem to feel more comfortable putting their money into stocks rather than playing Russian Rolette with the housing market, as housing prices are moving back into nose bled territory. According to the National Association of Realtors sales slid 7.1% to lowest pace since November. The run-up in prices appears to be due too little supply of affordable houses which is sidelining potential buyers, who are waiting for the market to pull back a bit before jumping in.
KB Home (NYSE:KBH) is among the worst performers on the New York Stock Exchange (NYSE) today, down 1.5% at $13.52. KBH was trading 76.30 in Jan. 2006 post a 2:1 split and it hasn’t seen much upside action since. The stock traded as low as $5.67 in September 2011 only to rally into the $20’s before settling in south of $14 for all of 2016. KBH is set to report Q1 2016 results on Wednesday (Mar 23rd). Investors aren’t’ very confident, as last quarter KBH reported negative earnings of 15.59%. Analysis’s blamed weather conditions in September and October, and labor shortages in some markets for the softer-than-expected home results for Q4 2015. However, the expectation is that the headwinds have dissipated and the company should have enough homes in queue to post a profit for Q1. That said, Zack’s currently has the stock rated as a Hold.