The Zacks Analyst Blog Highlights: D.R. Horton, Berkshire Hathaway, Masco, USG and Plum Creek Timber

For Immediate Release

Chicago, IL – September 27, 2011 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: D.R. Horton ( DHI - Analyst Report), Berkshire Hathaway ( BRK.B - Analyst Report), Masco ( MAS - Analyst Report), USG ( USG - Snapshot Report) and Plum Creek Timber ( PCL - Analyst Report).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Monday’s Analyst Blog:

New Home Sales Down Slightly

New Home Sales in August fell by 2.3% from July to a rate of 295,000. Relative to a year ago, sales are up 6.1%.

While the year-over-year rebound is more than welcome, it is still a very dismal rate of new home sales. However, there was an upward revision to the July numbers of 4,000 to 302,000. Thus, relative to where we thought we were, it could be seen as a 1.0% decrease. The August level was also slightly better than the expected rate of 295,000.

Regardless of the changes at the edges, this is still a very bad level. The 16 lowest months on record (back to 1963) for new home sales have all been in the last 16 months. New home sales have only exceeded the 400,000 level three times since September of 2008 when the financial markets collapsed. The most recent time was in April 2010 as sales were inflated by the rush to get in under the wire and collect the homebuyer tax credit. Sales collapsed after that, and August comp is thus a relatively easy one (although the effect was bigger in June and July).

Relative to the peak of the housing bubble (July '05, 1.389 million) new home sales are down 78.8%. Prior to September 2008, there had only been 20 months in which new home sales were below the 400,000 level, with the most recent being in 1982 (a very nasty recession brought on by sky high interest rates inflicted by the Fed to break the back of inflation).

The graph below shows the history of new homes sales (blue, left scale) along with the growth in population (red, right scale), since presumably if you have more people, you will need more places for them to live.

New Home Sales fall sharply before all recessions (with the exception of the dot.com bust caused recession of 2001) and then start to increase sharply in the middle of, or towards the end of, the recession. That clearly is not happening this time around.

If you want to know why the recovery has been anemic so far, look no further than the graph above! New home sales are vital to the overall economy. If new homes are not selling, then homebuilders have no reason to build more of them. After all, that is very expensive inventory to sit on.

Unlike used home sales, each new home built creates a huge amount of economic activity. Not only are low new home sales bad for the big homebuilders like D.R. Horton ( DHI - Analyst Report), but also for all the companies that make the products and supplies that go into making a new house. They range from Berkshire Hathaway ( BRK.B - Analyst Report) for bricks, roofing materials and insulation to Masco ( MAS - Analyst Report) for plumbing fixtures and cabinets to USG ( USG - Snapshot Report) for wallboard to Plum Creek Timber ( PCL - Analyst Report) for lumber.

In terms of employment, it is not just all the roofers and framers that lose jobs due to weak new home sales, but employees at all the firms that make the stuff that goes into making a new home. Of course, if those employees are out of work, they are not spending on other goods and services dragging down a host of seemingly unrelated businesses.

Not that the direct impact of construction jobs should be underestimated. Since the recession started, 31% jobs lost have come from the construction industry.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which 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! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

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 DHI

Read the full analyst report on BRK.B

Read the full analyst report on MAS

Read the full analyst report on USG

Read the full analyst report on PCL