FMHQ (Friday Morning Housing Quant)

Takeaway: It was another strong week for builder stocks as the average builder is now up +7.2% QTD. BZH rose 8% in the latest week.

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: Housing stocks put in another very strong week with the sole exception of Pultegroup (PHM), which sank on disappointing earnings. Interestingly, PHM is the one builder that has historically put up underwhelming 4Q returns so it begs the question whether there's something recurrent going on there. Returns remain extremely strong almost across the board with QTD absolute returns for ITB and XHB at +6.4% and +6.0% vs the S&P 500 +6.9%. Meanwhile, the average builder from our tables below is +7.2% QTD, while the median is +6.4%. Our preferred four horsemen of 4Q among builders are KBH, BZH, LEN & NVR, which are +2.4%, +14.2%, +7.7%, +8.2% QTD. BZH had a monster week, rising 8.0% on the week, while LEN and NVR were +4.1% and +5.8% on the week, respectively. KBH, meanwhile, declined by -2.5%. 

  • Insider Buying: Not much to report here, as there's been none recently.
  • Beta: The highest beta names (1YR) remain HOV (1.45), KBH and BZH which are tied at 1.30. At the other end of the spectrum, the lowest beta plays are NVR (0.60), MDC (0.89) and TOL (0.98).
  • Short Interest: DHI, HOV and KBH have seen SI creep higher, rising as a % of SO by 2.6%, 2.6% and 2.2%, respectively in the latest month. BZH has seen SI fall by 0.8%.
  • Sell Side Sentiment: MTH has seen the largest drop in sell side support, while BZH, TMHC and DHI have seen the largest bump in support.
  • Valuation: The cheapest names in the group currently are BZH (9.6x), TPH (9.5x) and TMHC (9.5x), while the most expensive are NVR (15.3x), LEN (13.4x), and TOL (13.4x).

 


FMHQ (Friday Morning Housing Quant) - BQ 1

 

FMHQ (Friday Morning Housing Quant) - BQ 2

 

FMHQ (Friday Morning Housing Quant) - BQ 3

 

FMHQ (Friday Morning Housing Quant) - BQ 4

 

 

 

Joshua Steiner, CFA

 

Christian B. Drake


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