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$18.85 -0.01 (-0.05%)
7/3/2008 1:02 PM

Toll Brothers, Inc. (TOL)

CAPS Rating:
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Designs, builds, markets & arranges financing for single-family detached & attached homes in luxury residential communities. Also involved in projects building, or converting existing rental apartment buildings into, high-, mid- & low-rise luxury homes.

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Avatar jstegma (99.72) Submitted: 4/10/08 12:42 PM : Underperform Start Price: $22.96 TOL Score: 1.42

For some reason people seem to think there is going to be a return to a boom in housing in 2009 or 2010. It's not going to happen. The sentiment that drove the housing boom will not return for a generation. The other thing to consider is what will happen to mortgage rates as a result of this current mess. The 5% mortgage is not going to be around in 5 years in my opinion. Look at oil and food prices - inflation is on its way. When you are expecting inflation of 3-4% per year, are you really interested in making 30 year loans at 5%, especially considering what happened to the last batch of mortgages? You'd be a fool (not the motley kind) to buy homebuilder stocks when the housing bubble is still deflating and the homebuilders are prices as if they will soon return to their earnings levels of the last boom. It's just not going to happen.

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