This party is over.
Anyone with guts shorts the heck out of the builders and lenders. But beware of manipulation - forces are at work that are greater than you
It's over though. It's over.
KB Home (KBH) has noticed a surge in cancellations and a drop-off in orders in the first two months of fiscal 2006, and if this trend continues, the company said it likely will have to ratchet down its revenue guidance for the year, according to a 10K filing.
The comments appear to be a sign that the sharp drop-off in orders recently reported by luxury builder Toll Brothers Inc. (TOL) may not be limited to the luxury segment as many market experts presumed.
"There are signs that consumer demand in the United States for residential housing at current prices is softening," KB Home said in its 10K, which was filed with the Securities and Exchange Commission on Friday. The Los Angeles builder noted that the U.S. Census Bureau reported that single-family housing starts in December fell 12% from November, and about 8% from December 2004.
Also, the bureau reported that the median sales price for new homes declined approximately 3% in December from a year earlier. "Our results to date in fiscal year 2006 reflect these broader market trends," the company said, whose fiscal year ends Nov. 30. "In the first two months of the (fiscal) year, we have experienced an increase in home order cancellations and a decline in net orders for new homes when compared to the same period last year." If this trend continues, "we may be required to moderate our revenue guidance for fiscal year 2006," KB Home said.
February 13, 2006
KB Home Says Cancellations Up, Orders Down So Far In '06
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3 comments:
My opinion may mean nothing as the builders drop. But I do find it strange that the philly housing index is holding it's ground thanks to the aggergate producers.
I'm not so sure the big money is giving up on the home builders. There seems to be alot of money flowing out of the home builders and into the more defensive end of the building index.
I BET THIS MONEY STARTS FLOWING BACK INTO THE HOME BUILDERS IN MARCH.
go ahead and quote me on that one.
I'm saying it takes some balls to short the builders. I'm not doing it myself. Do you think Bob Toll is going to go down without a fight? And look at what they got their poodle merrill lynch to do the other day with that upgrade on all of 'em.
But boy, the writing is on the wall. It'll be a nationwide clearance sale with the builders who will need to get rid of (at cents on the dollars) all that inventory
Like Cisco in 2000 my friends. Right when they peaked inventory and peaked production, the wheels fell off the cart.
i watch this from germany and i´m
shorting the homebuilderindex.
the only reason why the stocks havent tanked further so far is that they are buying back shares like they are mad.
the earnings look ok. but the quality of the earnings is getting poorer and poorer per quarter. they need to sell more and more land to make the numbers.
at some point they can´t affort the buybacks any longer. s+p and moddy´s are watching them and will downgrade their debt.
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