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Earlier this week, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly announced an increase in new residential sales in Mar 2017. According to the data, 621,000 new single-family houses were sold in March, 5.8% above the revised rate of 587,000 in February and 15.6% above the year-ago estimate of 537,000. Sales were specifically strong in the Northeast and West which recorded increases of 25.8% and 16.7%, respectively, while the Midwest recorded a decline of 4.5%. The South witnessed an increase of 1.6%.
The data comes on the heels of a report issued by the National Association of Realtors (NAR) last week which showed that existing home sales jumped 4.4% in March, reaching their highest level in more than 10 years. Strong consumer confidence, favorable demographics, pent-up demand, job gains and income growth are some of the factors that should continue boosting home sales. Moreover, according to the report, interest from first-time buyers has gone up this year.
How to Pick the Right Stocks
With the spring buying season (which is usually the busiest period for home sales) off to a promising start, investors should take a look at housing stocks that look well-placed in this market. With the help of the Zacks Stock Screener, we have zeroed in on 5 housing stocks with a VGM Score of “A” or “B” and a Zacks Rank #1 (Strong Buy) or #2 (Buy). Our research shows that stocks with a VGM Score of “A” or “B” when combined with a Zacks Rank #1 or #2 offer the best upside potential. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Home Builders segment also enjoys a good Zacks industry rank (Top 10% out of 256 industries). The Zacks-categorized Building-Residential/Commercial industry has outperformed the broader market (S&P 500) year-to-date (YTD) as well.
PulteGroup, Inc. (PHM - Free Report) : Atlanta, GA-based PulteGroup is one of the largest and most experienced homebuilders in the U.S. The company has a strong earnings track record having surpassed expectations in three of the last four quarters and meeting expectations in the remaining quarter. Estimated earnings growth for the current year is 31.9%. The company caters to all major buyer groups: first-time, move up & luxury and active adults. PulteGroup, which has a VGM score of “B”, is a Zacks Rank #2 stock.
The company has outperformed the Zacks-categorized Building-Residential/Commercial industry YTD with shares gaining 23.4%.
Century Communities, Inc. (CCS - Free Report) : Greenwood Village, CO-based Century Communities works on the development, design, construction, marketing and sale of single-family attached and detached homes in metropolitan areas in Colorado, Austin and San Antonio, Texas, Houston, Las Vegas, Nevada, Atlanta, Georgia, and Salt Lake City, Utah.
Earlier this month, the company announced its intention to combine with UCP, Inc. -- the combined company will have a presence in 10 states, 17 markets and 117 communities. The deal, slated to close in the third quarter, is expected to be accretive to 2018 earnings.
Century Communities has a strong earnings track record having surpassed expectations in each of the last four quarters with an average surprise of 6.6%. Estimated earnings growth for the current year is 19.4%. The company, which has a VGM score of “B”, is a Zacks Rank #2 stock.
Century Communities has outperformed the Zacks-categorized Building-Residential/Commercial industry YTD with shares gaining 31.9%.
M.D.C. Holdings, Inc. (MDC - Free Report) : Denver, CO-based M.D.C. is one of the largest homebuilders in the U.S. with its subsidiaries having homebuilding operations across the country, including the metropolitan areas of Denver, Northern Colorado, Colorado Springs, Salt Lake City, Las Vegas, Phoenix, Tucson, Riverside-San Bernardino, Los Angeles, San Diego, Orange County, San Francisco Bay Area, Sacramento, Washington D.C., Baltimore, Orlando, Jacksonville, South Florida and Seattle. Estimated earnings growth for the current year is 26.6%.
The Zacks Rank #2 stock has a VGM score of “A” and has outperformed the Zacks-categorized Building-Residential/Commercial industry YTD with shares gaining 22.3%.
Meritage Homes Corporation (MTH - Free Report) : Scottsdale, AZ-based Meritage is a leading designer and builder of single-family homes for first-time, move-up, luxury and active adult buyers across Western, Southern and Southeastern U.S. The company has a strong earnings track record having surpassed expectations in each of the four quarters of 2016 with an average surprise of 8.68%. The company, which has a VGM score of “B”, is a Zacks Rank #2 stock. Estimated earnings growth for the current year is 4.1%.
Taylor Morrison Home Corporation (TMHC - Free Report) : Scottsdale, AZ-based Taylor Morrison is a leading national homebuilder and developer that caters to a wide array of consumer groups from coast to coast, including first-time, move-up, luxury, and 55 plus buyers. The Zacks Rank #2 stock has surpassed earnings expectations in three of the last four quarters. Taylor Morrison has a VGM score of “A”. Estimated earnings growth for the current year is 10.1%.
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5 Housing Stocks to Buy as New Home Sales Rise
Earlier this week, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly announced an increase in new residential sales in Mar 2017. According to the data, 621,000 new single-family houses were sold in March, 5.8% above the revised rate of 587,000 in February and 15.6% above the year-ago estimate of 537,000. Sales were specifically strong in the Northeast and West which recorded increases of 25.8% and 16.7%, respectively, while the Midwest recorded a decline of 4.5%. The South witnessed an increase of 1.6%.
The data comes on the heels of a report issued by the National Association of Realtors (NAR) last week which showed that existing home sales jumped 4.4% in March, reaching their highest level in more than 10 years. Strong consumer confidence, favorable demographics, pent-up demand, job gains and income growth are some of the factors that should continue boosting home sales. Moreover, according to the report, interest from first-time buyers has gone up this year.
How to Pick the Right Stocks
With the spring buying season (which is usually the busiest period for home sales) off to a promising start, investors should take a look at housing stocks that look well-placed in this market. With the help of the Zacks Stock Screener, we have zeroed in on 5 housing stocks with a VGM Score of “A” or “B” and a Zacks Rank #1 (Strong Buy) or #2 (Buy). Our research shows that stocks with a VGM Score of “A” or “B” when combined with a Zacks Rank #1 or #2 offer the best upside potential. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Home Builders segment also enjoys a good Zacks industry rank (Top 10% out of 256 industries). The Zacks-categorized Building-Residential/Commercial industry has outperformed the broader market (S&P 500) year-to-date (YTD) as well.
PulteGroup, Inc. (PHM - Free Report) : Atlanta, GA-based PulteGroup is one of the largest and most experienced homebuilders in the U.S. The company has a strong earnings track record having surpassed expectations in three of the last four quarters and meeting expectations in the remaining quarter. Estimated earnings growth for the current year is 31.9%. The company caters to all major buyer groups: first-time, move up & luxury and active adults. PulteGroup, which has a VGM score of “B”, is a Zacks Rank #2 stock.
The company has outperformed the Zacks-categorized Building-Residential/Commercial industry YTD with shares gaining 23.4%.
Century Communities, Inc. (CCS - Free Report) : Greenwood Village, CO-based Century Communities works on the development, design, construction, marketing and sale of single-family attached and detached homes in metropolitan areas in Colorado, Austin and San Antonio, Texas, Houston, Las Vegas, Nevada, Atlanta, Georgia, and Salt Lake City, Utah.
Earlier this month, the company announced its intention to combine with UCP, Inc. -- the combined company will have a presence in 10 states, 17 markets and 117 communities. The deal, slated to close in the third quarter, is expected to be accretive to 2018 earnings.
Century Communities has a strong earnings track record having surpassed expectations in each of the last four quarters with an average surprise of 6.6%. Estimated earnings growth for the current year is 19.4%. The company, which has a VGM score of “B”, is a Zacks Rank #2 stock.
Century Communities has outperformed the Zacks-categorized Building-Residential/Commercial industry YTD with shares gaining 31.9%.
M.D.C. Holdings, Inc. (MDC - Free Report) : Denver, CO-based M.D.C. is one of the largest homebuilders in the U.S. with its subsidiaries having homebuilding operations across the country, including the metropolitan areas of Denver, Northern Colorado, Colorado Springs, Salt Lake City, Las Vegas, Phoenix, Tucson, Riverside-San Bernardino, Los Angeles, San Diego, Orange County, San Francisco Bay Area, Sacramento, Washington D.C., Baltimore, Orlando, Jacksonville, South Florida and Seattle. Estimated earnings growth for the current year is 26.6%.
The Zacks Rank #2 stock has a VGM score of “A” and has outperformed the Zacks-categorized Building-Residential/Commercial industry YTD with shares gaining 22.3%.
Meritage Homes Corporation (MTH - Free Report) : Scottsdale, AZ-based Meritage is a leading designer and builder of single-family homes for first-time, move-up, luxury and active adult buyers across Western, Southern and Southeastern U.S. The company has a strong earnings track record having surpassed expectations in each of the four quarters of 2016 with an average surprise of 8.68%. The company, which has a VGM score of “B”, is a Zacks Rank #2 stock. Estimated earnings growth for the current year is 4.1%.
Taylor Morrison Home Corporation (TMHC - Free Report) : Scottsdale, AZ-based Taylor Morrison is a leading national homebuilder and developer that caters to a wide array of consumer groups from coast to coast, including first-time, move-up, luxury, and 55 plus buyers. The Zacks Rank #2 stock has surpassed earnings expectations in three of the last four quarters. Taylor Morrison has a VGM score of “A”. Estimated earnings growth for the current year is 10.1%.
Looking for Ideas with Even Greater Upside?
Most of Zacks’ investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information>>