 |
Homebuilder Stocks
Is now the time to invest in Homebuilder Stocks? The National Association of Home Builders/Wells Fargo Housing Index showed November 2007 consumers confidence index at 19, the lowest reading since the index began in 1985. Less Access to credit and lower demand for new homes has resulted in the steady decline of these stocks throughout the USA. The five largest companies all reported higher than expected losses on their most recent financial periods. Fourth quarter returns from 2007 saw a decrease in housing prices as compared to fourth quarter returns from 2006. Most analysts are hesitant to conclude a correction is underway. A price rebound in 2008 is not expected, and it is already known that the foreclosure rate is going to proceed to higher levels. Historically, the average bear market in this sector lasts about 16 months. During this period of time, these stocks lose atleast 50% of their value. Whereas, the average bull market in this sector lasts in excess of 30 months and returns over 350% on average. The potential for extraordinary returns is quite enticing.
Homebuilder stocks success hinges on the sentiment of the consumer. If confidence levels are high, homebuilders generally do well, and vice versa. Triple-digit returns are possible if these out-of-favor stocks catch fire. I have isolated a Homebuilder investment that could possibly deliver tremendous returns.
Homebuilder Stocks RecommendationsThe Disclaimer: I am not a Registered Investment Advisor. Everything on this website is my opinion and put here for my readers enjoyment. I do not recommend making financial decisions based upon my opinions. I advocate doing your own research and making an informed decision. I openly disclose ownership in any stock I discuss. All information I provide on this website is obtained freely via the internet, radio and television. I do not have any deals with financial newsletters of any kind. My income from this website is produced from advertisements plainly displayed on the pages. |