Savvy Trades and Investments

[researcher59]

BZH +.48 to 22.79 in a strong homebuilder group this morning on news of much higher than expected housing starts for May. BZH has a somewhat higher than average debt/equity ratio for the sector, but also is the cheapest homebuilder both on the forward PE of around 5.7 and price/book of roughly .70 - it will be interesting to see the KBH earnings report later this week.

briefing -

Total housing starts surged 21.7% month-over-month to a seasonally adjusted annual rate of 1.631 million (Briefing.com consensus 1.400 million) following a downwardly revised 1.340 million (from 1.401 million) in April. That is the strongest pace of starts since April 2022. Total building permits increased 5.2% month-over-month to a seasonally adjusted annual rate of 1.491 million (Briefing.com consensus 1.425 million) following a revision to 1.417 million (from 1.416 million) for April.

The key takeaway from the report is rooted in the monthly growth for single-unit permits (+4.8%) -- a leading indicator -- and single-unit starts (+18.5%), which is a good sign for a supply-challenged housing market overall and a seemingly good portent for homebuilders' sales and earnings prospects.