On Jan 2, Zacks Investment Research upgraded
William Lyon Homes
), a California-based homebuilding company, to a Zacks Rank #1
(Strong Buy) following the company's solid third quarter 2013
results on Nov 11.
Why the Upgrade?
On Nov 11, William Lyon Homes' third quarter results beat the
prior year quarter levels on most of the parameters by
Though earnings missed the Zacks Consensus Estimate, reported
revenues surpassed the same by 0.6%. The company's revenues of
$151 million rose 62.2% year over year, driven by volume growth
and aggressive pricing. Margins also increased year over year.
The number of homebuilding deliveries increased to 356 units in
the third quarter of fiscal 2013, up 33% year over year,
attributable to a rise in demand for new homes. The average price
of homes delivered was $397,100 in the quarter, up 39.0% year
Despite the supply shortage in the homebuilding market, the
company ended third quarter fiscal 2013 with 13,156 owned and
controlled lots, an increase of 15% year over year. Supply of
homes is expected to remain stable in the upcoming quarters.
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JAMES HARDI-ADR (JHX): Free Stock Analysis
WILLIAM LYON HM (WLH): Get Free Report
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Despite increasing mortgage rates and housing prices, the number
of net orders signed was 312 in the third quarter of fiscal 2013,
up 12% year over year. Value of net orders signed during the
quarter was $142.4 million, up 87% year over year.
The company's backlog totaled 467 homes as of Sep 30, 2013, up
13% year over year. Potential housing revenues from backlog grew
92% year over year to $208.1 million.
William Lyon Homes benefited from the growing momentum of the
housing market recovery, particularly along the west coast. The
company witnessed strong price appreciation, particularly in
Arizona, California and Nevada, which led to an increase of 580
basis points in homebuilding gross margin to 23.6%.
Other Stocks to Consider
Other stocks worth considering in the industrial goods sector
CaesarStone Sdot-Yam Ltd.
James Hardie Industries plc
). While CaesarStone Sdot-Yam and James Hardie Industries carry a
Zacks Rank #1 (Strong Buy), Gafisa S.A. carries a Zacks Rank #2