With the huge rally off the lows, these stocks are now no longer priced for potential bankruptcy. Do you think they are still a buy at these levels, or are they a short, or would you wait for a hefty pullback and then look to go long there for further recovery.
i think they are a tough buy at these levels. not sure if you noticed that pretty much ANYTHING related to housing has had a massive rally off of lows. stocks like SHW and MHK and that sort of stuff. so it's probably short covering and some value buying. i think they have bottomed but the one thing i can't figure out is what exactly these guys are saying that makes investors not care about how badly they are missing earnings estimates. it could either be some other numbers that investors are looking at other than earnings that are improving or it could be the analysts were too lazy to revise earnings estimates. i am inclined to think it was some of both. anyhow...i'd wait for a pullback. maybe we get that pullback when the monoline insurers get downgraded or maybe some other random credit blow up. i guess that random credit blow up may come from the muni market now from what the talk is. i don't really understand it but something about how they had to pull a muni bond auction because the buyers wouldn't step up and it was like the first time that had happened. i just heard a blurb about it so i didn't understand it. i dunno...just rambling a bit. sorry i do that when i am fleshing out my thoughts. alright i'll stfu now.
most of the rally is from short covering plus expectations of future changes with the gse's, historically homebuilding bottoms with new homes sales at 400k so quite a bit more down to go, if they rally a bit more I may reenter to short a few
In the short-term they can well move higher if the market keeps going up. But longer-term I am in the pullback camp. IMO it is a combination of heavy value-investor buying, lots of short-covering, and the fading of bankruptcy risk. These were the most beaten up and shorted stocks in the market, after all.
Of course. BUY BUY BUY. They are perfect at these levels, cough cough. NAR reports the "rebound and bottom is in play". RE agents are making a killing right now! Homes are selling like hotcake and all the "CDO mess" is finally out and contained. BUY BUY BUY,
Recent homebuilder stock upsurge is pure speculatory off of interest rate cuts. thinking its going to stimulate the real estate market again in the near to midterm...it aint gonna happen !! But the long term fundamentals for homebuilders looks "dire" to put it mildly. Definite short sell opportunities abound with these homebuilder stocks...this is a case of instead of "buy off the the dip"......its "sell off of the upsurge"