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alstry (36.12)

Dumb Dumb Goldberg?

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February 24, 2008 – Comments (0)

The following is an excerpt from a MarketWatch article:

BOSTON (MarketWatch) -- UBS analyst David Goldberg in a research note Friday raised his price target on shares of home builder Ryland Group Inc.  to $28 from $21, with a neutral rating. "Following fourth-quarter results, we're increasingly confident for a 2009 bottom," he wrote. "In the meantime, we expect near-term instability driven by increasing capital constraints on smaller, private builders." This will lead to lower supply and generate opportunities for stronger companies to buy land at deep discounts, Goldberg said. "Ryland is well positioned to capitalize on this, given its land light model and liquidity, which will likely boost profitability," he said, adding that Ryland is better insulated against near-term housing weakness relative to its peers with bigger land positions. Ryland's shares slipped more than 2% to $27 Friday morning.

Increasingly confident for a 2009 bottom?  I guess that means his call for a 2008 bottom has been pushed back.

We expect near-term instability?  That seems to mean things are going to be really tough in the near term because of difficulties facing smaller private builders...now that is a good reason to push back any bottom call to 2009.

This will lead to lower supply?  It appears that Mr. Goldberg doesn't read the paper.  In CA, there were more foreclosures in January than home sales.  If this trend continues, supply will INCREASE even if not a single homebuilder, public or private, builds any more homes and not a single existing homeowner puts their home up for sale.  Now that is some in depth analysis by Mr. Goldberg.

Ryland is well positioned to capitalize on this, given its land light model and liquidity, which will likely boost profitability?  Didn't RYL just file an 8K amending its loan agreement to a lower borrowing base and adding in cash as an eligible asset....any thoughts what that could mean:)

UBS analyst David Goldberg in a research note Friday raised his price target on shares of home builder Ryland Group Inc.?  Oh, maybe I have to retract my commentary?

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