Make yourself at home in these homebuilding stocks. Check out KBHome (KBH) and Pulte Home (PHM). (March 03, 2017)
XHB KBH PHM
We are going to look at Homebuilders ( NYSEARCA:XHB ). This is a sector that everybody seems to be talking about different things. I want to look at Homebuilders ( NYSEARCA:XHB ) because some of them are just starting to look good. It is interesting too because it has been trading sideways for quite a while and we are just about ready to get a rate hike from jumpin’ Janet and the jellybeans. In a couple weeks they are going to hike rates. And it seems like maybe people are anticipating, investors are anticipating that the Fed is going to say that everything is great, I don’t know. But we are getting a move into these homebuilding stocks and this can be pretty profitable. Here is the deal: This if just the ETF. You don’t want to be buying the ETF, it has got the diamonds as well as the dog stuff in there. Just go for the ones that are working the best. You can see where this is starting to perk up, I would say, modestly higher.
Look at KB Home ( NYSE:KBH ). This was a pretty solid buy signal; we covered this before. The stock had been trading in this range. After this had gapped up here and then traded down, the stock started moving higher again on pretty good volume, on really good volume here. So you are buying this stock, you are up about 4-5 percent already. Now, you zoom out. After you have taken the stock, you zoom out. How long do you want to hold this stock? I would say at least hold the stock until $20.00, that is another 10 percent. Doesn’t it look like that is where it is going? We don’t have to look at fundamentals. We don’t have to look at interest rates. All we have to do is look at the chart. A little bit of a momentum factor on this stock and it is rolling pretty good. Then you look at the fundamentals, their growth rate is 35 percent. For a homebuilder? That is not too shabby.
PulteGroup ( NYSE:PHM ) is the biggest one, at least the last time I checked. This is another stock, I have got to tell you, technically I like KB ( NYSE:KBH ) better, but this is a stock that had been squeezing. You can see the kind of move this thing had, we are drawing the zigzags here. It is a little bit of a bowl type thing, we could call this a really sloppy cup and handle, and now we have got a breakout. Here, while KB ( NYSE:KBH ) had a 35 percent growth rate; PulteGroup ( NYSE:PHM ) had a 48 percent growth rate. So these stocks, from a fundamental standpoint, are not expensive. They are not going to make you the kind of money that some of these real high-flyers are going to make; like if you had loaded into the trade desk a couple weeks ago. But these are stocks that you can have some assets in. They are breaking out, ultimately look like they are moving higher and I want you to check these out.
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