One of the leading homebuilding companies in the U.S.,
) recently acquired 34 acres of land in Live Oak, Texas. The
company is currently investing in land development for 172 home
sites in the new community of Ironwood at Crestway. The models
home are expected to be opened in June.
Owing to its operational business model KBnxt, KB Home always
begins construction only after a purchase agreement is executed.
Therefore, consumers buying KB homes get the liberty to plan
their homes according to their preference. The consumers can
choose from 14 one- or two- storey floor plans for their homes in
Ironwood at Crestway.
KB Home intends to open more than 120 communities in fiscal
2013, with more communities scheduled to come up in the later
half of the year. As such, the community count is expected to
increase by at least 15% to 20% by the end of next year. The
company expects profitability for fiscal 2013.
The rising demand for new homes has led to a favorable
situation in the housing market, where inventory levels are
dropping and prices are moving up. As such most home building
companies are constructing increased number of new homes in order
to maintain the required level of inventory to meet the growing
With housing market recovery gaining momentum, KB Home
believes its strategic initiatives such as overhead reduction,
margin expansion, and land investments in higher-priced,
better-located communities; and increasing backlog will help it
achieve profitability in the upcoming quarters. Though we have
faith in KB Home's strategic initiatives, we believe that it may
take time to achieve sustainable profitability as the housing
market recovery process is erratic and uneven.
KB Home carries a Zacks Rank #3 (Hold).
Stocks in the in the homebuilding sector that are currently
performing well include
) with a Zacks Rank #1 (Strong Buy).
The Ryland Group, Inc.
D.R. Horton Inc.
) hold a Zacks Rank #2 (Buy).
D R HORTON INC (DHI): Free Stock Analysis
KB HOME (KBH): Free Stock Analysis Report
NVR INC (NVR): Free Stock Analysis Report
RYLAND GRP INC (RYL): Free Stock Analysis
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