One of the leading U.S. homebuilding companies,
Meritage Homes Corporation
), recently completed the purchase of Phillips Builders, another
homebuilder based in Nashville, TN. With the acquisition,
Meritage will add 500 lots and 150-200 homes by 2014 to its
The company's Nashville homebuilding operation will continue
under the Phillips Builders brand name and will be headed by
Jason and Charlie Phillips, veterans with years of experience in
the homebuilding business. Beginning 1952, Phillips Builders has
gained a high popularity in Nashville for its high quality homes
with price tags ranging from $175,000 to over $425,000.
Nashville boasts flourishing health care, publishing, banking
and transportation businesses. The area is prosperous with an
educated population, owing to the huge concentration of colleges
and universities, excellent business opportunities and widespread
industrial structure. We appreciate Meritage's strategy to expand
its operation into Nashville as the town has opportunities to
grow and thus can nurture steady demand for homes in the years to
The company strategically focuses on acquiring new home sites.
This acquisition is expected to bolster the company's position in
the highly lucrative housing market in the Southeastern region of
the United States. During the past two years, the company has
acquired four homebuilding businesses. Additionally, improved
market conditions in the Western, Southwest and Southeast regions
have accelerated Meritage's growth.
We favor the Zacks Rank #2 (Buy) company's ability to
capitalize on the gradual recovery in the housing market by
raising prices modestly and recording improved top-line growth.
However, Meritage Homes faces tough competition from the resale
), has established its presence in Nashville with the acquisition
of 40 home sites in the Tollgate Village community. With this
acquisition, Lennar now has homebuilding operations in 19 states
and 46 markets across the nation.
Other stocks in the homebuilding sector that are performing
well and deserve a mention include
Standard Pacific Corp.
TRI Pointe Homes, Inc.
) both carrying a Zacks Rank #2 (Buy).
LENNAR CORP -A (LEN): Free Stock Analysis
MERITAGE HOMES (MTH): Free Stock Analysis
STANDARD PAC (SPF): Free Stock Analysis
TRI POINTE HOME (TPH): Free Stock Analysis
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