Tricky market right now - very oversold ("worst June since the Great Depression") and prone for some bounce but not doing so (I find that bearish). Sort of seems like a market where a lot of people would be willing to jump in, if it showed any real strength... but everyone is looking around the room waiting for someone else to go first. It certainly is not going to be me.
A few quick transactions
Buy in Research in Motion (RIMM) - I had this as a 0.1% stake going into the week and bought a small splotch yesterday to get it to 0.4% but was targetting $120 to add anymore, but today it gapped
China is going to be the next great country. The 19th century was the century of the U.K. The 20th century was the century of the U.S. The 21st century is going to be the century of China.
China is going to be the next great country. The 19th century was the century of the U.K. The 20th century was the century of the U.S. The 21st century is going to be the century of China.
For those that wondered what my stance on Lennar is after raising cash through property sales and tax refunds, here is my update to the Voodoo analysis.
Summary
The worst housing slump in recent history has taken its toll on US home builders, with most of them reporting consecutive quarterly losses in the second half of 2007. Lennar, in particular, reported negative earnings for the fifth consecutive quarter in 4Q2007, witnessing a negative EPS of $6.08 compared with a negative $1.23 in 4Q2006. Its large inventory write-down of approximately $2.4 bn in 2007 along with losses on land sale ...
As the financial crisis spreads quickly from Wall Street to other industries, two large home builder projects have received default notices. The problems involve developments in Las Vegas, where house prices have collapsed.
A project involving KB Homes (NYSE: KBH), Lennar (NYSE: LEN), and Toll Brothers (NYSE: TOL) has failed to make interest payments on $765 million in debt.
If you have been watching homebuilders of late, you'll notice a sharp disconnect between the headlines still coming out and the stock prices of many homebuilders. The move today is partly attributed to Sam Zell's interview on CNBC saying this spring should mark the bottom in housing. The SPDR S&P Homebuilders (AMEX: XHB) ETF shares are up 6.3% at $22.56 today, and its 52-week low is $15.22.
3/10 - "The real estate bottom is so far in the future it’s not even worth attempting a prediction...It simply takes time for people to recognize that even real estate markets can fluctuate on the down side.
In general, this will always result in a real estate market that lags the general economy. Thus, anyone who accepts the preceding statement as reality should easily recognize the ridiculousness of predicting a real estate bottom when we haven’t even experienced the recession yet!"
"The banks don’t have a clue what’s going on, and these insignificant write offs we have witnessed to dat...
3/15 - "...already weakened firms could face a credit crisis of their own as home prices continue to drop and the potential value of homes under construction face going on the market for a fraction of what they may have brought just a year ago.
Some of the large home building company stocks have lost over two-thirds of their value over the last year, and that may only be the beginning."
Retailers are not reporting very strong results currently, just ask Lowe's (LOW). The company lowered guidance materially, and said that too many uncertainties exist to call the bottom. Also, Target (TGT) lowered its September same-store sales forecast. The combination pushed the retail index down to a -3.0% decline in early trading.
Homebuilder Lennar (LEN) also posted dismal results, posting a net loss vs. the consensus for a gain. The company has cut its work force by 35% and anticipates futher job losses. The homebuilder index is down -2.1% currently.
Lennar(LEN) become the latest victim today, with a 73 percent plunge in first-quarter earnings. When everything looks bad, that's the best time to buy. I would not be afraid to start a position in...
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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 Lennar Corp.
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