FMHQ (Friday Morning Housing Quant)

11/20/15 12:34PM EST

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. 

Takeaways: 

  • Performance Roundup: Housing resumed its normal 4Q seasonal momentum in the latest week with the average builder up 3.0% on the week vs the S&P 500 rising 1.7%. This brings the QTD performance back into solidly green territory. QTD absolute returns for ITB and XHB stand at +7.2% and +5.0% vs the S&P 500 +8.4%. Meanwhile, the average builder from our tables below is now +2.1% QTD. Our preferred four horsemen of 4Q among builders are NVR, LEN, BZH & KBH, which are +8.4%, +5.1%, +6.2%, Unch'd QTD, respectively. The three best performing builders thus far this quarter are DHI (+9.2%), NVR (+8.4%) and TOL (+8.1%), while the three worst performing builders are TMHC (-10.5%), HOV (-5.1%), and MTH (-3.1%).
  • Insider Buying: Other than the Director at Hovnanian (HOV) who purchased 20k shares (~$45k) in late October, there's been no recent insider buying in the sector.
  • Beta: The highest beta names (1YR) remain HOV (1.52), KBH and BZH which are at 1.33 and 1.36, respectively. At the other end of the spectrum, the lowest beta plays are NVR (0.61), MDC (0.93) and TOL (1.00).
  • Short Interest: CAA, KBH and DHI have seen SI creep higher, rising as a % of SO by 5.0%, 4.2% and 1.5%, respectively in the latest month. TMHC, HOV & MTH have seen SI fall by 2.3%, 2.0% and 1.8%, respectively.
  • Valuation: The cheapest names in the group currently are BZH (7.5x), MTH (9.6x) and TMHC (9.2x), while the most expensive are NVR (15.2x), LEN (13.3x), and TOL (13.6x). Incidentally, NVR, at 5.3x TBV, is currently at 99% of its peak 5-year valuation.

FMHQ (Friday Morning Housing Quant) - BQ1

FMHQ (Friday Morning Housing Quant) - BQ2

FMHQ (Friday Morning Housing Quant) - BQ3

FMHQ (Friday Morning Housing Quant) - BQ4

Joshua Steiner, CFA

Christian B. Drake

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