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Takeaway: NVR, one of our top two names for the quarter, continues to lead the group at +15.1% QTD and +10.3% on NTM earnings estimate revisions.

Our FMHQ (Friday Morning Housing Quant) tables present the state of the publicly traded homebuilders in a visually-friendly, quantitative format that takes about 60 seconds to consume. 

Quick Quant Takeaways: 

  • Performance Roundup: The broader Housing complex has been outperforming the Homebuilders QTD.  While the S&P 500 is down 6.8% QTD through mid-day, the ITB (+0.8%) and XHB (-1.8%) are mixed. The average and median QTD returns for the 11 homebuilders we include in our table, however, are down -6.0% and -4.4%, respectively. The best performing homebuilder this quarter is NVR with a +15.1% QTD gain. NVR was one of two builders we favored for 3Q15. The other was Toll Brothers, which is down -3.2% for the QTD. The worst performing builders this quarter include HOV (-34.2%) and BZH (-18.1%). 
  • Estimate Revisions: NVR continues to lead the pack in terms of NTM earnings estimate revisions over the last 3mos (+10.3%), followed by DHI (+6.6%) and LEN (+5.9%). At the other end of things, HOV and BZH have seen NTM estimates cut by -14.2% and -5.3% over the last 3mos. 
  • Housing Macro | Employment:  Employment growth within housing’s key demand demographic of 25-34 year olds was flat sequentially at +2.3% YoY while accelerating payroll growth in the 20-24 YOA bucket drove acceleration in the aggregate 20-34 YOA group. Resi Construction employment was also flat sequentially with year-over-year growth decelerating -60bps to +4.0%. There are a couple takeaways:  First, employment growth on both the supply and demand sides of housing continue to outperform the broader averages.  Second, tightening resi labor market conditions are finding flow through to price with earnings growth for residential construction workers and single-family GC’s running at a notable premium to the broader average. Hourly earnings grew +4.8% YoY in the latest month for resi construction workers while growing 2.2% YoY in the private sector in aggregate and +2.4% for NonSupervisory & Production workers (who the BLS estimates = ~80 of the labor force).

  • *Bonus Bullet:  Completely unrelatedly, this week’s Friday Morning Housing Quant devolved into the Friday Afternoon Housing Quant due solely to our spontaneous over-reminiscing about the Karate Kid (see this morning’s Early Look).

    A quick compilation for your holiday weekend enjoyment:

    The Crane Kick >> HERE

    Johnny’s Back! >> HERE

    Daniel is the Real Bully >> HERE

FMHQ (Friday Morning Housing Quant) - Buiider Quant 1 QTD with edits 

FMHQ (Friday Morning Housing Quant) - Buiider Quant 2

FMHQ (Friday Morning Housing Quant) - Buiider Quant 3 with edits

FMHQ (Friday Morning Housing Quant) - Compendium 090415

FMHQ (Friday Morning Housing Quant) - U.S. Eco Summary Table

FMHQ (Friday Morning Housing Quant) - 20 34 YOA Employment

FMHQ (Friday Morning Housing Quant) - Resi Construction Employment

FMHQ (Friday Morning Housing Quant) - Resi Construction Earnings

Joshua Steiner, CFA

Christian B. Drake