One of the leading homebuilding companies in the U.S.,
) recently closed a new unsecured revolving credit facility worth
$200 million. The company intends to use the proceeds from the
offering to support its growth plans.
The credit facility included a clause where the commitment may be
increased to up to $300 million, subject to other conditions.
Its growth plans include aggressive investment in land,
activating communities, which were held for future development,
increasing revenues per community, and strengthening management
teams with additional resources.
Of late, KB Home has been involved in aggressive investment in
land assets and communities. 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. This has
necessitated the building of adequate number of new homes to
maintain the required level of inventory to meet growing demand.
Acquiring lots and lands will help the company to capitalize on
the increasing housing demand.
KB Home intends to open more than 120 communities in 2013, with
more communities slated 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 proceeds from the offerings
will support the company in meeting its targets.
KB Home carries a Zacks Rank #3 (Hold).
Other stocks in the homebuilding sector that are performing well
and deserve a mention include
) carrying a Zacks Rank #1 (Strong Buy), and
D. R. Horton Inc.
Hovnanian Enterprises Inc.
), carrying a Zacks Rank #2 (Buy).
D R HORTON INC (DHI): Free Stock Analysis
HOVNANIAN ENTRP (HOV): Free Stock Analysis
KB HOME (KBH): Free Stock Analysis Report
NVR INC (NVR): Free Stock Analysis Report
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