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Housing Bubble? Not from This Duo
05/16/2003 12:00 am EST
"The doom and gloom crowd have been
predicting the end of the housing boom for some time and yet the housing market
continues to grow," says
Adds John Buckingham, "For those who think there is a housing bubble, we offer this tidbit from the National Association of Realtors: US housing affordability rose to its highest level since 1973. The current reading means that a family with a national median income makes 44% more than is needed to buy a median-priced home. We maintain three homebuilding stocks on our recommended buy list - Beazer Homes (BZH NYSE), D.R. Horton (DHI NYSE), and Standard Pacific (SPF NYSE). Horton reported a 44% increase in net income and diluted earnings of $0.86 a share for its fiscal second quarter, ending March. In addition, Horton's record $3.5 billion backlog has allowed the company to raise its full fiscal year earnings forecast to a range of $3.60-$3.65 a share. Meanwhile, Beazer reiterated its full year 2003 (ends 9/03) profit forecast of $12.25 per share after reporting net income of $2.83 in the second fiscal quarter. Finally, Standard Pacific, which recently announced record first quarter backlog and hiked full year 2003 (ending 12/03) earnings per share guidance to $4.65-$4.75, remains a favorite holding. We rate Beazer Homes a buy up to $74.49, Horton a buy up to $25.59, and Standard Pacific a buy up to $30.98."
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