Zacks Investment Ideas feature highlights: Pulte, Ryland, Toll Brothers, KB Homes and Lennar

For Immediate Release

Chicago, IL – June 10, 2011 – Today, Zacks Investment Ideas feature highlights Features: Pulte (PHM - Analyst Report), Ryland (RYL - Snapshot Report), Toll Brothers (TOL - Snapshot Report), KB Homes (KBH - Analyst Report) and Lennar (LEN - Analyst Report)

Bernanke Still on Housing Watch

Of the 250+ industry groups that Zacks tracks, Building-Residential/Commercial currently has a very weak Industry Rank of 235. The Zacks Industry Rank rating system drills down deep for very granular classifications of companies.

And it is based very simply on the average, un-weighted Zacks Rank of the individual stocks within a group so as to capture the same effect of earnings estimate revisions. In short, the Industry Rank is derived from the strength of the stocks within the group.

For instance, if an industry has 10 companies in it with an average rank of 2.5, it can be likened to a Zacks Rank of between 2 and 3. But more importantly, it must now compete with the other 250+ industry groups on relative performance.

The Zacks Industry Rank is best used by focusing on the top third of groups as "green light" industries you want to look for opportunities in, the middle third as "yellow light" groups warranting caution, and the bottom third as flashing a "red light" and signaling to stay away.

The Building-Residential/Construction group currently has 16 stocks within it, including Pulte (PHM - Analyst Report), Ryland (RYL - Snapshot Report), and Toll Brothers (TOL - Snapshot Report) who all are Zacks #3 Rank (Hold) stocks. KB Homes (KBH - Analyst Report) and Lennar (LEN - Analyst Report) are Zacks #4 Rank (Sell) stocks in this group.

Combined with the other 10 names in this group, the average Zacks Rank comes out to 3.5, putting it well in the bottom third of all groups with an Industry Rank of 235. The main take away here is that Homebuilder analysts are still not optimistic about an earnings recovery for these companies. And if the builders can’t make money, it confirms housing is still soft and likely to continue to impact other areas of the economy.

Going Beyond the Builders

Because the Zack Industry Rank just takes an average of the stocks within a group, it can be prone to highlighting extremes that are useful and some that should be ignored. For example, an industry group with only 2 or 3 stocks in it could score very high or very low as an industry based on the individual companies Zacks Rank.

What's significant is when an industry group has a large number of names as this one does. In that way, its industry rank is telling you something significant not only about those companies, but about their type of business as a group.

Beyond that, if you see similar industry groups also clustered in the same third, you have a meaningful trend to describe the larger industry or sector. In the case of housing and construction, Wood products, Cement and Aggregates, and Miscellaneous Building products are all in the bottom third of industries as well.

Until one or two of these four groups moves up into the middle third of industries, housing is still on thin ice. And that means the economy has structural risks that Bernanke is focused on.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Len Zacks. The company continually processes stock reports issued by 3,000 analysts from 150 brokerage firms.  It monitors more than 200,000 earnings estimates, looking for changes.

Then when changes are discovered, they’re applied to help assign more than 4,400 stocks into five Zacks Rank categories:  #1 Strong Buy, #2 Buy, #3 Hold, #4 Sell, and #5 Strong Sell. This proprietary stock picking system; the Zacks Rank, continues to outperform the market by nearly a 3 to 1 margin.  The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter Profit from the Pros.  In short, it’s your steady flow of profitable ideas GUARANTEED to be worth your time.  Get your free subscription to Profit from the Pros at:  http://at.zacks.com/?id=7298

Follow us on Twitter:  http://twitter.com/ZacksResearch

Join us on Facebook:  http://www.facebook.com/ZacksInvestmentResearch

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
http://www.zacks.com

Read the full analyst report on PHM

Read the full analyst report on RYL

Read the full analyst report on TOL

Read the full analyst report on KBH

Read the full analyst report on LEN