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SPF, HOV, PHM, KBH, LEN, RYL, Building Resident - Commercial Stocks Undervalued

^{Published on 2011-05-10 06:30:19 - WOPRAI}
 

May 10, 2011/ M2 PRESSWIRE / BUYINS.NET / http://www.squeezetrigger.com is monitoring the Building Resident - Commercial sector and these stocks are the most undervalued as of today. STANDARD PACIFIC CORP (NYSE:SPF), HOVNANIAN ENTERPRISES-A (NYSE:HOV), PULTEGROUP INC (NYSE:PHM), KB HOME (NYSE:KBH), LENNAR CORP-A (NYSE:LEN), RYLAND GROUP INC/THE (NYSE:RYL) 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               $3.63          $9.51          61.80% Undervalued          Building Resident - Commercial
     HOV        HOVNANIAN ENTERPRISES-A             $2.86          $11.44         75.00% Undervalued          Building Resident - Commercial
     PHM        PULTEGROUP INC                      $7.79          $17.51         55.50% Undervalued          Building Resident - Commercial
     KBH        KB HOME                             $11.52         $23.24         50.40% Undervalued          Building Resident - Commercial
     LEN        LENNAR CORP-A                       $18.27         $23.83         23.30% Undervalued          Building Resident - Commercial
     RYL        RYLAND GROUP INC/THE                $16.43         $24.73         33.60% Undervalued          Building Resident - Commercial

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.

HOVNANIAN ENTERPRISES-A (NYSE:HOV) - Hovnanian Enterprises, Inc. engages in homebuilding and financial services businesses in the United States. The company designs, constructs, markets, and sells single-family detached homes, attached townhomes and condominiums, mid-rise and high-rise condominiums, urban infill, and active adult homes. It markets and builds homes for first-time buyers, first and second-time move-up buyers, luxury buyers, active adult buyers, and empty nesters. The company offers homes for sale in 192 communities in 40 markets in 18 states in the United States. It also provides various financial services, including originating mortgages from homebuyers and selling such mortgages in the secondary market, as well as offers title insurance services. The company was founded in 1959 and is headquartered in Red Bank, New Jersey.

PULTEGROUP 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.

KB HOME (NYSE:KBH) - KB Home constructs and sells residential homes in the United States. It builds various homes, including attached and detached single-family homes, townhomes and condominiums, which are designed to appeal to first-time, move-up, and active adult buyers. The company provides title and insurance services to its homebuyers. It also offers mortgage banking services to its homebuyers indirectly through KBA Mortgage, LLC, a joint venture with a subsidiary of Bank of America, N.A. KB Home operates in Arizona, California, Colorado, Florida, Maryland, Nevada, North Carolina, South Carolina, Texas, and Virginia. As of November 30, 2009, it delivered 8,488 homes. The company was formerly known as Kaufman and Broad Home Corporation and changed its name to KB Home in 2001. KB Home was founded in 1957 and is headquartered in Los Angeles, California.

LENNAR CORP-A (NYSE:LEN) - Lennar Corporation, together with its subsidiaries, operates as a home builder and provider of financial services in the United States. The company's homebuilding operations include the construction and sale of single-family attached and detached homes, and multi-level residential buildings, as well as the purchase, development, and sale of residential land directly and through unconsolidated entities. Its financial services comprise providing mortgage financing, title insurance, and closing services for buyers of its homes and others. As of November 30, 2009, the company owned 82,703 homesites and had access through option contracts to an additional 21,173 homesites. It serves customers in Florida, Maryland, New Jersey, Virginia, Arizona, Colorado, Texas, California, Nevada, Illinois, Minnesota, New York, North Carolina, and South Carolina. Lennar Corporation was founded in 1954 and is based in Miami, Florida.

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.

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