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SPF, RYL, PHM, MTH, MHO, MDC, Building - Resid - Comm Stocks 53.93% undervalued

^{Published on 2011-01-26 11:00:59 - WOPRAI}
 

November 17, 2010 / M2 PRESSWIRE / BUYINS.NET / http://www.squeezetrigger.com is monitoring the Building - Resid - Comm sector and these stocks are the most undervalued as of today. STANDARD PACIFIC CORP (NYSE:SPF), RYLAND GROUP INC/THE (NYSE:RYL), PULTE GROUP INC (NYSE:PHM), MERITAGE HOMES CORP (NYSE:MTH), M/I HOMES INC (NYSE:MHO), MDC HOLDINGS INC (NYSE:MDC) are all expected to go Up as they are undervalued according to industry standard valuation metrics. The valuation model employs a three-factor approach to stock valuation using fundamental variables--the company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's forecasted 12-month EPS, and the 30-year Treasury yield--to create a highly accurate reflection of a company's fair value.

The chart below displays the projected Fair Value and Valuation discount/premium of the most undervalued stocks in the highlighted industry group:

     Symbol     Company Name                        Last Close     Fair Value     Valuation                   Industry               
     SPF        STANDARD PACIFIC CORP               4.57           9.92           53.93% undervalued          Building - Resid - Comm
     RYL        RYLAND GROUP INC/THE                17.86          23.24          23.15% undervalued          Building - Resid - Comm
     PHM        PULTE GROUP INC                     8.33           18.17          54.17% undervalued          Building - Resid - Comm
     MTH        MERITAGE HOMES CORP                 23.35          27.21          14.20% undervalued          Building - Resid - Comm
     MHO        M/I HOMES INC                       14.89          20.79          28.38% undervalued          Building - Resid - Comm
     MDC        MDC HOLDINGS INC                    31.36          37.68          16.77% undervalued          Building - Resid - Comm

Here are some of the variables that are utilized when calculating the Fair Market Valuation of a stock: Long-run EPS growth rate, Duration of Business-growth-cycle, Volatility of EPS growth rate, Systematic or beta risk of the firm, Correlation between the firm's EPS and the interest rate environment, EPS growth volatility, Dividend payout ratio, Buffer earnings, Interest rate related criteria: Interest rate (30 year yield) long-run level, Duration of interest rate cycle, Interest rate volatility. The Fair Market Valuation uses 12-month historic and forecasted EPS values and the current 30-year treasury yield as primary determinants. When calculating risk/return values such as the Sharpe ratio, the historic periods used are five years.

Some expected results of the Valuation Model are: the valuation of a stock increases in a declining interest rate environment. Increasing current and/or projected EPS will produce a higher Valuation. While long-term EPS growth would produce a corresponding long-term Valuation increase, concomitant long-term interest rate increases would offset EPS growth and depress the Valuation. The shorter a company's own business cycle, the higher its stock Valuation will be.

STANDARD PACIFIC CORP (NYSE:SPF) - Standard Pacific Corp. operates as a diversified builder of single-family attached and detached homes in the United States. It constructs homes within various price and size ranges targeting diversified homebuyers with operations in major metropolitan markets in California, Florida, Arizona, Texas, the Carolinas, Colorado, and Nevada. The company, through its mortgage banking subsidiary, originates loans for its homebuyers, which are generally sold in the secondary mortgage market. In addition, Standard Pacific, through its title services subsidiary, acts as a title insurance agent performing title examination services for its Texas homebuyers. As of December 31, 2009, the company had 198 projects. Standard Pacific was founded in 1986 and is headquartered in Irvine, California.

RYLAND GROUP INC/THE (NYSE:RYL) - The Ryland Group, Inc., together with its subsidiaries, operates as a home building and mortgage-finance company in the United States. The companys operations cover various aspects of the home buying process, including design, construction, and sale. It offers single-family detached homes; and attached homes, such as town homes, condominiums, and mid-rise buildings, as well as sells land and lots. The Ryland Group also provides mortgage-related products and services, as well as title, escrow, and insurance services to its homeowners and subcontractors. It markets its homes to entry-level, and first and second-time move-up buyers. The company was founded in 1967 and is headquartered in Calabasas, California.

PULTE GROUP INC (NYSE:PHM) - Pultegroup, Inc., through its subsidiaries, engages in homebuilding and financial services businesses primarily in the United States. The companys homebuilding business includes the acquisition and development of land primarily for residential purposes within the continental United States; and the construction of housing on such land targeted for first-time, first and second move-up, and active adult home buyers. As of March 31, 2010, its homebuilding operations offered homes for sale in 842 communities. The companys financial services business consists of mortgage banking and title operations. It arranges financing through the origination of mortgage loans for its homebuyers; sells such loans and the related servicing rights; and provides title insurance policies as an agent, and examination and closing services to its home buyers. The company was formerly known as Pulte Homes, Inc. and changed its name to PulteGroup, Inc. in March 2010. Pultegroup was founded in 1956 and is headquartered in Bloomfield Hills, Michigan.

MERITAGE HOMES CORP (NYSE:MTH) - Meritage Homes Corporation engages in designing and building single-family attached and detached homes in the southern and western United States. It offers various homes for a range of homebuyers, including first-time, move-up, luxury, and active adult buyers in 12 metropolitan areas of Arizona, California, Nevada, Texas, Colorado, and Florida. The company conducts its homebuilding and marketing activities under the Meritage Homes, Monterey Homes, and Legacy Homes brand names. Meritage Homes Corporation was founded in 1985 and is based in Scottsdale, Arizona.

M/I HOMES INC (NYSE:MHO) - M/I Homes, Inc., together with its subsidiaries, engages in the construction and sale of single-family residential properties. The company offers single-family homes, attached townhomes, and condominiums to first-time, move-up, empty-nester, and luxury buyers under the M/I Homes and Showcase Homes trade names. It designs, sells, and builds single-family homes on finished lots, which it develops or purchases ready for home construction. The company also purchases undeveloped land to develop into finished lots for construction of single-family homes and for sale to others. In addition, it provides mortgage financing services, such as originating mortgage loans, as well as offers title services to purchasers of its homes. Further, the company offers insurance services. M/I Homes, Inc. has operations in Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Chicago, Illinois; Tampa and Orlando, Florida; Charlotte and Raleigh, North Carolina; and Virginia and Maryland suburbs of Washington, D.C. As of December 31, 2009, it had 2,410 developed lots and 664 lots under development in inventory, as well as owned raw land expected to be developed into approximately 4,121 lots. The company was founded in 1973 and is based in Columbus, Ohio.

MDC HOLDINGS INC (NYSE:MDC) - M.D.C. Holdings, Inc., through its subsidiaries, provides homebuilding and financial services in the United States. It operates in two segments, Homebuilding, and Financial Services and Other. The Homebuilding segment constructs and sells single-family detached homes to first-time and first-time move-up homebuyers under the Richmond American Homes name. The Financial Services and Other segment originates mortgage loans primarily for homebuyers, as well as brokers mortgage loans for origination by outside lending institutions. This segment also offers third party insurance products and title agency services to its homebuyers, as well as provides general liability coverage for construction work performed associated with closed homes. The company was founded in 1972 and is based in Denver, Colorado.

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