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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Doughboy who wrote (15244)	11/25/2003 6:42:28 AM
From: Doughboy	Read Replies (2) \| Respond to of 306849

Apparently, this is the reason that the homebuilder stocks surged yesterday. Homebuilders 2nd Biggest Gainers Following Wachovia Note By JANET MORRISSEY Of DOW JONES NEWSWIRES NEW YORK -- The nation's homebuilders were the second largest gainers Monday after investors appeared to react to a Wachovia Securities report that predicted builders have the potential to advance 20% or more over the next 12 months. Heavy construction was the top performer in mid-Monday trading. "To put it bluntly, the debate over whether or not the homebuilding industry is changing is over," said Wachovia Securities analyst Carl Reichardt in a note. The ability for companies to grow by grabbing market share from smaller, less liquid, private homebuilders "is supported by ten years of solid evidence," he said. And many builders have conservative risk profiles, "offering more protection from a slowdown in housing demand," he said. These factors are not reflected in current valuations, he added. Although the group has advanced 99% in 2003 - outpacing the S&P 500's 18% gain - Reichardt said builders still have good prospects for 20% or more growth over the next 12 months. As he revamped valuations, he changed his ratings on some companies. He upgraded Pulte Corp. (PHM) to outperform from market perform, and downgraded KB Home (KBH) to market perform from outperform. The companies offering the greatest upside potential are Lennar Corp. (LEN), Standard Pacific Corp. (SPF), Toll Brothers Inc. (TOL), Pulte, and Centex Corp. (CTX), he said. The Dow Jones equity index of Home Construction stocks was up 3.59%, second only to heavy construction companies. Builders were up across the board, with Toll Brothers enjoying the biggest gain at 6.4%. Others advancing more than 3% include Centex, D.R. Horton (DHI), Hovnanian Enterprises Inc. (HOV), Lennar, M.D.C. Holdings Inc. (MDC), Pulte, Standard Pacific and Ryland Group Inc. (RYL). Wachovia Securities has had an investment banking relationship with D.R. Horton, Lennar, and Ryland over the past 12 months. The analyst doesn't hold shares in any of the companies. -By Janet Morrissey, Dow Jones Newswires; 201-938-2118 Updated November 24, 2003 3:58 p.m.