With the housing market recovery expected to gain further
traction in 2014 and buyers adjusting to higher mortgage rates
and increased home prices, most homebuilding companies are
maintaining a strong liquidity position to increase investments
and capitalize on the housing momentum.
BEAZER HOMES (BZH): Free Stock Analysis
MERITAGE HOMES (MTH): Free Stock Analysis
STANDARD PAC (SPF): Free Stock Analysis
TOLL BROTHERS (TOL): Free Stock Analysis
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One of the homebuilding companies,
Meritage Homes Corporation
) recently offered 2,200,000 shares of its common stock. On Jan
10, The company priced the stock offering at $95.9 million or
$45.75 per share. The company plans to use the proceeds from the
offering for expansion in new or existing markets, which includes
acquisitions and for other general corporate purposes.
Meritage Homes recently reported preliminary results for the
fourth quarter and fiscal 2013, the full results of which are
slated to be released on Feb 05. The company expects double-digit
increase in home closing revenues; number of homes closed, net
order and order value in the fourth quarter and fiscal 2013. The
company also expects significant increase in home closing gross
margin during the period.
The company has been witnessing strong top-line growth and margin
expansion for the past few quarters. However, the sales pace of
the company has slowed down recently owing to headwinds like
recent spike in mortgage rates, rising home prices, tight credit
availability and the political uncertainty in Washington. The
recent increase in cash will help the company improve its
inventory by building more homes thus, strengthening its position
in the upcoming quarter.
Meritage Homes Corporation currently carries a Zacks Rank #3
However, some better-ranked stocks in the homebuilding sector
Beazer Homes USA Inc.
Toll Brothers, Inc.
Standard Pacific Corp.
). All the three companies carry a Zacks Rank #2 (Buy).