Ticonderoga Securities Homebuilding & Building Products / Preview - July Pending Home Sales
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Price: $154.12 -1.01%
Rating Summary:
24 Buy, 8 Hold, 3 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
Rating Summary:
24 Buy, 8 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
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Ticonderoga Securities Homebuilding & Building Products / Preview - July Pending Home Sales
July Pending Home Sales are reported tomorrow at 10ET. Consensus expectations call for a 1.0% sequential decline in the index to 74.9 from 75.7. Year-over-year, this equates to a 24.0% decrease from 98.1. Appreciating that July New Home Sales posted a 12.4% sequential decline, the PHS consensus, nonetheless, could prove realistic to just a tad aggressive. As well, we remind investors that builder equities have responded rather favorably of late concurrent with some rather ugly macro housing data releases. Should PHS data come in near expectations, it is our expectation that this mini-rally in the group over the past few days will be extended. It appears investors have elected to greatly discount near-term disappointing housing data, realizing it offers little predictive value given the post tax credit slump combined with seasonal issues.
We guard against using July NHS results as an absolute guidepost for tomorrow’s PHS release. Investor participation in the Existing Home market continues to have the potential to mute comparisons between the two segments of the market. Further, potential NHS revisions could diminish the month-over-month drop in sales from June to July. Our field research is not indicative of a July New Home market depressed to the extent Census metrics imply, but rather was flattish to slightly improved for the builders we canvassed. Moreover, we note that July’s New Home Sales pace (276K) was 2.0% below the May pace (281K), thereby calling to question the veracity of the 315K reported in June. Extending this analysis to PHS would imply a 76.2 reading tomorrow or up 1% versus June.
Stocks of note include Lennar (NYSE: LEN), KBHome (NYSE: KBH), D.R. Horton (NYSE: DHI), The Ryland Group, Inc. (NYSE: RYL), PulteGroup, Inc. (NYSE: PHM), Toll Brothers, Inc. (NYSE: TOL), Meritage Homes (NYSE: MTH), M.D.C. Holdings (NYSE: MDC), Comstock Homebuilding (Nasdaq: CHCI), Beazer Homes USA, Inc. (NYSE: BZH) and Standard Pacific Corp. (NYSE: SPF)
July Pending Home Sales are reported tomorrow at 10ET. Consensus expectations call for a 1.0% sequential decline in the index to 74.9 from 75.7. Year-over-year, this equates to a 24.0% decrease from 98.1. Appreciating that July New Home Sales posted a 12.4% sequential decline, the PHS consensus, nonetheless, could prove realistic to just a tad aggressive. As well, we remind investors that builder equities have responded rather favorably of late concurrent with some rather ugly macro housing data releases. Should PHS data come in near expectations, it is our expectation that this mini-rally in the group over the past few days will be extended. It appears investors have elected to greatly discount near-term disappointing housing data, realizing it offers little predictive value given the post tax credit slump combined with seasonal issues.
We guard against using July NHS results as an absolute guidepost for tomorrow’s PHS release. Investor participation in the Existing Home market continues to have the potential to mute comparisons between the two segments of the market. Further, potential NHS revisions could diminish the month-over-month drop in sales from June to July. Our field research is not indicative of a July New Home market depressed to the extent Census metrics imply, but rather was flattish to slightly improved for the builders we canvassed. Moreover, we note that July’s New Home Sales pace (276K) was 2.0% below the May pace (281K), thereby calling to question the veracity of the 315K reported in June. Extending this analysis to PHS would imply a 76.2 reading tomorrow or up 1% versus June.
Stocks of note include Lennar (NYSE: LEN), KBHome (NYSE: KBH), D.R. Horton (NYSE: DHI), The Ryland Group, Inc. (NYSE: RYL), PulteGroup, Inc. (NYSE: PHM), Toll Brothers, Inc. (NYSE: TOL), Meritage Homes (NYSE: MTH), M.D.C. Holdings (NYSE: MDC), Comstock Homebuilding (Nasdaq: CHCI), Beazer Homes USA, Inc. (NYSE: BZH) and Standard Pacific Corp. (NYSE: SPF)
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