I honestly can’t believe that more investors are not looking at unloading long positions in the homebuilders. Right now, by virtue of the fact that there’s a lack of good analytic ‘eyeballs’ slicing and dicing the industry numbers and the homebuilder financials, the homebuilder stocks are the most inefficiently overvalued sector of the stock market besides a few select tech stocks. I’ve been trading every part of the homebuilder capital structure since 1994 (bank debt, sub debt, pfd equity, common stock) and right now this is the easiest call I’ve seen in that period of time.
Here’s my latest assessment of the macro housing data, backed up by some evidence I’m correct that comes right out of Toll Brother’s earnings report two days ago, when TOL’s stock was hit for 5%: Housing Market Data Continues To Support The Bear View.
This post was published at Investment Research Dynamics on September 5, 2014.
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