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Technology Stocks : John, Mike & Tom's Wild World of Stocks -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (2318)	5/16/2001 12:55:30 PM
From: hamsandwich	Read Replies (1) \| Respond to of 2850

John, et al, A note from Briefing today addressing Kim's downgrade of the builders. regards, ham 10:45 ET ****** Homebuilding Stocks : If Jonathan Joseph of Salomon Smith Barney is widely recognized as one of the most influential analysts following the semiconductor sector, then it is fair to say investors should regard Stephen Kim of Salomon Smith Barney as one the most influential analysts following the homebuilding sector. Interestingly, Mr. Joseph made a name for himself last summer by calling the peak in the semiconductor cycle; meanwhile, Mr. Kim made a name for himself by essentially calling the bottom for the homebuilding stocks. The latter call was made on August 7 to be exact, and it was highlighted by upgrades of BZH, DHI, PHM, KBH and MDC. Separately, Kim reiterated BUY ratings on LEN, CTX and TOL. That bullish call launched a rally in the homebuilding sector that saw most of the aforementioned stocks surge close to, or more than, 100% from their lows prior to Kim's upgrade to their interim peaks in the wake of the upgrade. Briefing.com points this out because Mr. Kim is downgrading a number of stocks this morning, citing a belief that the risk involved with investing in the stocks at current levels outweighs the upside potential since national housing figures are likely to weaken by mid-year, if not sooner. The stocks he downgraded to NEUTRAL from Outperform include BZH (61.09 -4.96), WBB (39.35 -0.85), RYL (49.40 -5.06) and HOV (17.98 -1.22). Mr Kim also lowered his opinion of SHLR (13.84 -0.86) and MDC (36.30 -3.60) to OUTPERFORM from Buy. Aside from the downgrades, the common tie for each of these stocks is that they are the smaller-cap components in the industry. As for the larger-cap issues, Mr. Kim maintained BUY ratings on CTX (42.22 -1.22), KBH (28.64 -1.12), PHM (44 -1.15), and LEN (41.86 -0.87). He also maintained a BUY rating on SPF (22.54 -0.76), which is a small-cap company. Many investors are bound to be disappointed by Mr. Kim's call, but Briefing.com thinks it is the correct call. Our caution also extends to the larger-cap stocks, though, as we believe difficult comparisons, the fact that mortgage rates have stopped declining, and the lagging effect of a growing number of layoffs on the housing market, will make further multiple expansion difficult to achieve.-- Patrick J. O'Hare, Briefing.com