No one likes housing stocks. The market for existing and new homes is simply too poor. Hovnanian, Pulte, DH Horton, and Lennar are all down between 10% and more than 30% over the last year. And, Hovnanian is off the most. The stock hit almost $55 in January and now trades at about $35.
Hovnanian will announce earnings in about a week and there will be plenty of speculation between now and then. But, analyst sentiment toward the sector, especially Hovnanian, has started to turn positive. Even Hovnanian’s CEO has said he thinks the sector has bottomed. The bears are not listening.
Morningstar likes Hovnanian’s diverse geographic distribution and conservative approach to land strategy. The analyst firm has a fair market estimate of $60 on the company, close to double the current price.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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