looking to cover under $10 in the short term to fill in the gap from the other day.

Zacks Analyst Blog Highlights: Lennar, Toll Brothers, Countrywide, MGIC and Washington Mutual

Nov 30, 2007 6:00:00 AM

Copyright Business Wire 2007

CHICAGO--(BUSINESS WIRE)--

Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the <org> Zacks Equity Research </org> analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Lennar (NYSE: LEN), Toll Brothers (NYSE: TOL), Countrywide (NYSE: CFC), MGIC (NYSE: MTG) and Washington Mutual (NYSE: WM).

See the latest posts to the Analyst Blog by visiting: http://at.zacks.com/?id=2673

     Here are highlights from Thursday's Analyst Blog: 
  
     New Home Sales 
  

There has been some improvement on the inventory front, with SAAR inventories down 2.3% for the month and down 6.7% year over year. However, even within that number there is some cause for concern: inventories of completed houses are actually up 13.7% year over year. It is the inventories of houses under construction that are down most sharply, down 17.3% year over year and the inventory of not-started houses (basically improved lots) is down 9.5% year over year.

Still, based on the as-yet-unrevised October selling rate, the months of supply dipped to 8.5 months from 9.0 months in September, but still up from 7.1 months a year ago. I would expect the October numbers will be revised down next month; virtually all of the revisions over the last 18 months have been downward.

By price, there was a fair amount of strength in the starter home market (less than $200,000) where on a non-seasonally adjusted basis 26,000 homes were sold in October vs. 19,000 in September and 25,000 a year ago. The McMansion category (greater than $500,000) also did OK, with sales up to 7,000 from 5,000 last month but down from 9,000 a year ago (the numbers are only released as 7, 5 and 9, so there is a pretty wide range of potential percentage changes in those numbers). The move-up market is not faring as well with sales of just 24,000 in October, down from 31,000 in September and 40,000 a year ago.

In short -- and short is a good place to be -- the homebuilders like Lennar (NYSE: LEN) and Toll Brothers (NYSE: TOL) are not out of the woods. The time to buy the survivors is after the second or third of those stocks writes the eleventh chapter in their corporate histories. Nor do I see this report as good news for any of the big mortgage players such as Countrywide (NYSE: CFC), MGIC (NYSE: MTG) or Washington Mutual (NYSE: WM).

http://stockcharts.com/c-sc/sc?s=CFC&p=D&yr=0&mn=...