The Ryland Group (RYL)

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Zacks Investment Ideas feature highlights: M.D.C. Holdings, Ryland Group and Meritage Homes

CHICAGO, Aug. 19, 2013 -- /PRNewswire/ --

Today, Zacks Investment Ideas feature highlights Features: M.D.C. Holdings, Inc. (NYSE:MDC-Free Report), Ryland Group Inc. (NYSE:RYL-Free Report) and Meritage Homes (NYSE:MTH-Free Report).

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Value Investors: Buy Housing Now

Housing stocks were the darling of 2012 and started off 2013 on a hot streak. But in May, the stocks peaked and it's been downhill ever since even though many of the homebuilders have reported better than expected earnings and the year over year earnings growth is expected to be phenomenal.

What gives?

The homebuilders are a classic case of what was once hot is now not.

But the sell off has created an opportunity for the savvy value investor.

In May, many were concerned about excessive valuations of the homebuilders as they hit new highs, but that's not the case now that the stocks have plunged. Far from it.

There's plenty of value to be found in many of the homebuilders. Not only that, you can get double digit earnings growth and an attractive Zacks Rank.

If you loved the homebuilder stocks as they were going up just a few months ago, now's your chance to get them while they're cheap.

Homebuilders are Confident

If anything, the fundamentals in the sector have actually improved since the stocks peaked in the spring. On Aug 15, the Homebuilders Confidence Index hit an 8-year high as it rose to 59 from 56 in July. The homebuilders haven't been this confident since the housing boom and bubble years.

They have a reason to be confident. Housing inventories, both new and existing, are running a multi-year lows in most major markets yet low interest rates and record stock prices, which have boosted confidence, have spurred buyers.

The builders are buying land again and have pricing power in many states.

One fly in the ointment may be rising mortgage rates, but even at 5%, mortgage rates would still be near all-time lows. Homebuyers have been in hibernation for 7 years. 2013 has been the first year where buyers have appeared and the demand has not been temporary.

The homebuilders believe the momentum will continue into 2014. The pieces are in place. We're in the early stages of the housing recovery.

There will be hiccups. But now is a chance to get some of the homebuilders at incredible prices.

3 Best Values in Housing Ryland Group Inc.



2. Ryland Group Inc. (NYSE:RYL-Free Report) Ryland is one of the most recognizable homebuilders in the country. It operates in 14 states.

On July 24, it reported second quarter results where revenue soared 67.8% year over year. New orders rose 56.7% to 2,191 from 1,398 in the second quarter of last year. The average closing price jumped 13% to $287,000.

For the first six months of 2013, gross profit margin was 20%, up from 18.2% for the same period in 2012.

Housing gross profit margin was 20.0 percent for the six months ended June 30, 2013, compared to 18.2 percent for the six months ended June 30, 2012.

Forward P/E = 5.2 P/B = 2.0 P/S = 1.2 2013 expected earnings growth of 558% Zacks Rank #2 (Buy)

Read more here: http://www.sacbee.com/2013/08/19/5662516/zacks-investment-ideas-feature.html#storylink=cpy
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