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TOL, NVR, MHO, BZH, MTH, DHI, Building Resident - Commercial Stocks Undervalued

^{Published on 2011-05-10 06:30:06 - 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. TOLL BROTHERS INC (NYSE:TOL), NVR INC (NYSE:NVR), M/I HOMES INC (NYSE:MHO), BEAZER HOMES USA INC (NYSE:BZH), MERITAGE HOMES CORP (NYSE:MTH), DR HORTON INC (NYSE:DHI) 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               
     TOL        TOLL BROTHERS INC                   $20.11         $21.02         4.30% Undervalued           Building Resident - Commercial
     NVR        NVR INC                             $733.00        $761.64        3.80% Undervalued           Building Resident - Commercial
     MHO        M/I HOMES INC                       $12.61         $18.76         32.80% Undervalued          Building Resident - Commercial
     BZH        BEAZER HOMES USA INC                $4.14          $13.42         69.20% Undervalued          Building Resident - Commercial
     MTH        MERITAGE HOMES CORP                 $22.54         $26.56         15.10% Undervalued          Building Resident - Commercial
     DHI        DR HORTON INC                       $11.81         $14.76         20.00% 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.

TOLL BROTHERS INC (NYSE:TOL) - Toll Brothers, Inc. engages in designing, building, marketing, and arranging finance for single-family detached and attached homes in luxury residential communities in the United States. It also involves in building or converting existing rental apartment buildings into high-, mid-, and low-rise luxury homes. The company serves move-up, empty-nester, active-adult, age-qualified, and second-home buyers in 21 states. Toll Brothers was founded in 1967 and is headquartered in Horsham, Pennsylvania.

NVR INC (NYSE:NVR) - NVR, Inc. operates as a homebuilder in the United States. It engages in the construction and sale of single-family detached homes, town homes, and condominium buildings under the trade names of Ryan Homes, NVHomes, Fox Ridge Homes, and Rymarc Homes primarily to first-time homeowners and first-time move-up buyers. The company markets its products in Maryland, Virginia, West Virginia, Pennsylvania, New York, North Carolina, South Carolina, Florida, Ohio, New Jersey, Delaware, Indiana, Kentucky, and Tennessee, as well as in Washington, D.C. NVR, Inc. also offers mortgage banking services to its homebuilding customers, including mortgage financing and brokerage of title insurance, as well as performs title searches in connection with mortgage loan closings. The company, formerly known as NVHomes, Inc., was founded in 1979 and is based in Reston, Virginia.

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.

BEAZER HOMES USA INC (NYSE:BZH) - Beazer Homes USA, Inc. designs, builds, and sells single-family and multi-family homes in the United States. It offers homes for entry-level, move-up, or retirement-oriented buyers. The company also provides title insurance services to its homebuyers. Beazer Homes USA sells its homes through commissioned employees and independent brokers. The company was founded in 1985 and is headquartered in Atlanta, Georgia.

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.

DR HORTON INC (NYSE:DHI) - D.R. Horton, Inc. operates as a homebuilding company in the United States. The company operates in two segments, Homebuilding and Financial Services. The Homebuilding segment engages in the acquisition and development of land, and construction and sale of residential homes on the land in 27 states and 75 markets in the United States. This segment also provides traditional single-family detached homes, as well as builds attached homes, such as town homes, duplexes, triplexes and condominiums, which share common walls and roofs. It constructs and sells homes primarily under the name of D.R. Horton, Americas Builder. The Financial Services segment involves in originating and selling mortgages, as well as provides title insurance agency and closing services. The company markets and sells its homes through commissioned employees and independent real estate brokers. The company was founded in 1978 and is based in Fort Worth, Texas.

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