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$9.45 0.08 (0.85%)
5/16/2008 4:02 PM

Hovnanian Enterprises, Inc. (HOV)

CAPS Rating:
*

Designs, constructs and markets high quality single-family detached homes and attached condominium apartments and townhouses in planned residential developments in the Northeast.

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Total Players

342 Outperforms
620 Underperforms
 

All-Stars

83 Outperforms
347 Underperforms
 

Wall Street

2 Outperforms
4 Underperforms
 

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Ticker Tags

Home Builder (13), Residential Construction (27), Micro Cap (4824)
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Hovnanian Enterprises, Inc. At A Glance

Current Price: $9.45
Last Trade Time: 5/16/2008 4:02 PM
Open: $9.85
Previous Close: $9.37
Daily Range: $9.23 - $9.97
52-Week Range: $4.25 - $27.04
Volume: 6,617,789
Market Cap: $581.12M
P/E Ratio: 11.90
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Stock Trends

HOV VS S&P 500 (SPY)

HOV 12 month chart vs. S&P

News & Discussion Boards

Other News Headlines for HOV

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Top Bull Pitch

Recs

5

Hovnanian Enterprises, Inc. (HOV)

Avatar IDJim90 (28.60) Submitted: 3/03/08 12:17 PM

Companies have to take write-downs based on 'Mark-to-Market' valuation. In the present atmosphere, this will cause companies (like HOV) to under-value their holdings and consequently the market will under-price their stock. Housing will come back and HOV is positioned to gain due to their market s...More

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Top Bear Pitch

Recs

15

Hovnanian Enterprises, Inc. (HOV)

Avatar TDRH (100.00) Submitted: 3/20/08 9:38 AM

From Michael Brush MSN Article:

Hovnanian Enterprises (HOV, news, msgs) recently amended its options plan to allow the board to lower the exercise prices on options, making them more profitable for the execs who hold them.

Hovnavian finance chief Larry Sorsby responded that options re-pricing may...More

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Recs

0

 (HOV)

Avatar lanapash (84.14) Submitted: 5/16/08 6:32 PM : Underperform Start Price: $12.02 HOV Score: 26.28

I own a KHov home, so maybe it is my desire to see some gains despite the loss in the value of my home.

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Recs

0

 (HOV)

Avatar Troy2008 (95.60) Submitted: 5/16/08 3:01 PM : Underperform Start Price: $11.78 HOV Score: 22.92

News Story

Text Size: A A AIt's official: Spring-sales season a bust for housing market
1:34 PM EDT May 16, 2008
BOSTON (MarketWatch) -- The hoped-for rebound in home sales failed to blossom this spring with the housing market caught in a downward spiral, as falling prices continue to sap consumer sentiment and keep would-be buyers on the sidelines.

The all-important sales season that unofficially kicks off after the Super Bowl again failed to lift the residential market out of its doldrums. Although a surprising jump in April housing starts was reported Friday by the Commerce Department, enthusiasm was tempered by the fact that the gain reflected a jump in multifamily units. Starts of single-family homes lost nearly 2% to the lowest rate since 1991.

There are other reasons why it's not yet time to break out the champagne to celebrate a bottom in the housing market. The sagging confidence of home builders points to more pain this summer. On Thursday, the National Association of Home Builders said that its sentiment index fell close to a historical low. "The housing market has shown no evidence of improvement thus far," said David Seiders, chief economist for the builder trade group. See full story.

The final nail in the coffin for the spring-selling period came this week after luxury-home builder Toll Brothers Inc. reported dismal sales figures for the quarter ended in April. The company's chief executive, Robert Toll, said traffic levels at its communities were "the worst that we have ever seen."

Toll distilled the housing market's woes into two main problems. First, price declines and buyer anxiety are feeding off each other. For example, some customers are putting down deposits on homes, but are then getting cold feet and backing out. These cancellations are only adding to the inventory of unsold homes on the market, and economists say demand can only begin to return once the market works its way through the glut.

Most buyers are canceling because "they go to their friends and neighbors and say, 'We just bought a new home,' and everybody says, 'What, are you crazy? Prices are dropping,'" according to the chief executive.

The median existing single-family home price in the first quarter was down nearly 8% from the year-earlier period, the National Association of Realtors reported Tuesday. Some of the steepest declines have been in formerly hot markets such as Arizona, California and Florida.

Meanwhile, economists continue to look in vain for signs that falling home sales are stabilizing, which brings up the second main problem for home builders -- especially those that cater to move-up buyers like Toll Brothers. Many potential buyers are finding it nearly impossible to sell their existing properties.

Another home-building giant, D.R. Horton Inc. , said earlier this month that it lost more than $1 billion in the latest quarter and cut its dividend in half.

"It appears the spring-selling season was a bust for Toll, just like all the other builders," commented Morningstar analyst Eric Landry.

But you wouldn't know that by looking at the recent performance of Toll's stock and the builder sector. Shares of the Horsham, Pa.-based company were up more than 18% for the year to date through May 14, handily outpacing the S&P 500 Index amid a rally in home-builder stocks, which historically tend to bottom before the housing market itself.

Housing headwinds

Residential-housing stocks are seen as a leading indicator, yet there are many reasons why the volatile sector's recovery could be premature. "Continued negative market sentiment created a rather dismal spring-selling season, and buyer traffic is at reportedly low levels," said Anna Torma at Soleil Securities Group.

"Starts will need to continue to come down as builders need to further reduce excess inventory. In addition, the high level of foreclosures continues to weigh on the industry," she added. "The current credit crisis is keeping lending standards very tight, creating further headwinds."

Other worrying signs for the housing market and home builders include the following:

The skyrocketing costs of energy are crimping families already nervous about a slowing economy and inflation. Many think the United States is already in a recession, or are bracing for one. Consumer sentiment dropped in May to its lowest level since 1980, according to a Friday report, as higher fuel and food prices, coupled with declining home values, weighed on confidence. See full story.

Home builders continue to wrestle with cancellations and inventory impairments. Some companies have been forced to renegotiate terms with lenders, and if their banks cut them off, it could spell trouble and lead to industry consolidation. Builders facing the greatest pressure have weak balance sheets and cash flows, higher debt levels, and more exposure to soft markets and joint ventures.

Many borrowers are finding it difficult to qualify for mortgages under tighter lending standards as a result of the subprime mess and credit-market turmoil. Banks and financial institutions want lower loan-to-value ratios and better credit scores.

Strapped homeowners are in danger of defaulting on loans as their adjustable-rate mortgages reset higher. Another problem is negative equity as a result of falling prices, where borrowers owe more on the mortgage than the home is worth. Foreclosures are the last thing a market already saddled with a massive inventory overhang needs. On Tuesday, Irvine, Calif.-based RealtyTrac said that foreclosure filings in April rose about 65% from a year ago.

Even though lower home prices could lure bargain hunters, mortgage rates are expected to climb, which adds to the overall cost of a home.

Rays of hope

Despite the gloom, there are a few encouraging signs emanating from the U.S. housing market. Here are some bright spots on the storm's horizon:

Falling housing starts means home builders have been scaling back construction, which is gradually reducing their backlogs and the supply glut. This will help the market work off inventory. Also, builders are steadily scaling back their book of "speculative" homes, or those without a buyer due to a cancellation.

Some of the hardest-hit markets are finally starting to show a pulse. For example, Toll Brothers recently said that it raised prices in Naples, Fla. -- one of the epicenters of the housing bust.

Builders are attracting traffic and sales when they run promotions featuring price reductions, incentives or other concessions.

The government is taking a more active role in providing support to the housing market, which helped fuel the first-quarter rally in home-builder stocks. Additionally, the Federal Reserve has slashed interest rates and pumped liquidity into mortgage markets. Limits on conforming-mortgage loans have been raised, and there is also talk of tax incentives for home buyers that could provide a lift. Read more on increased conforming-loan limits.

Still, any hopes for a recovery in 2008 have been dampened by more weak housing data, and Toll Brothers' latest results "brought further confirmation that this year's spring-selling season has again been a letdown," according to Deutsche Bank analyst Nishu Sood.

"It is clear we have not yet hit bottom in the housing market," said Richard Syron, chief executive at mortgage giant Freddie Mac, during a conference call this week. He estimated that home prices have fallen 9% so far during the housing downturn, less than Freddie Mac's forecast of a 15% national decline.

"We want to take a better look at the spring-housing market to see whether or not the data is beginning to firm up," he added. Although Syron pointed out that it was premature to make a formal change in the estimate, "at this point we must say that the risk to the forecasts is strongly weighted on the downside."

Former Federal Reserve Chairman Alan Greenspan, speaking at an investment conference in Asia this week, said that U.S. home prices won't bottom until 2009 when the excess supply of homes is eliminated.

Robert Toll, the colorful chief executive, summed it up this week: "We don't believe this will last forever, although I can give you no indication that the end is in sight, or that the light at the end of the tunnel is not the train coming toward you."

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Recs

0

 (HOV)

Avatar halliday21 (46.35) Submitted: 5/16/08 12:02 PM : Underperform Start Price: $9.31 HOV Score: -0.92

Next leg down for the homebuilders, that was a classic fools rally!

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Recs

0

 (HOV)

Avatar Dadux2 (73.76) Submitted: 5/15/08 1:59 PM : Underperform Start Price: $9.17 HOV Score: -2.39

Smart co. but bad times in builderland.

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Recs

0

 (HOV)

Avatar Tankota (97.63) Submitted: 5/13/08 10:33 AM : Underperform Start Price: $6.26 HOV Score: -42.80

FloridaBuilder closed his underperform pick, but I's got's to be hoden on to mines a bit longer.

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