The Top Homebuilder Short Squeezes | stockbee


The Top Homebuilder Short Squeezes

This story in is worth keeping an eye on. As I have said before the homebuilders are due for a rally and I have been holding BHS since my last post. Many of them looked prime for a 10 to 25% move from here. When a short squeeze gets going, it will not be pretty.

One of the most heavily shorted industries is the residential construction industry, thanks to the subprime-mortgage debacle, rising interest rates, overspeculation and a surplus of inventory for sale. The short-sellers are hoping for a continued drop in the price of homebuilder stocks, but any sudden positive news, such as an interest-rate cut by the Federal Reserve, or even a rumor of one, could send the price of the stocks higher as short-sellers are forced to cover their positions. For this reason, at Stockpickr we have put together the Short-Squeeze Housing Stocks, a list of heavily shorted names in the sector. The second most shorted homebuilder is Brookfield Homes (BHS) , with a short ratio of 26 and more than 21% of the float sold short. The Virginia-based company specializes in luxury single-family and multifamily construction. The stock has a trailing price-to-earnings ratio of 5, but the company's revenue has dropped by more than 24% year over year. The stock appears on Barron's Insider Purchases 6-25-07, making this list after CEO Ian Cockwell last month purchased 133,800 shares, or about $4 million worth of stock. This portfolio also lists a couple of other stocks with high short ratios,

Homebuilders to watch:
AVTR,Avatar Holdings Inc (Google Yahoo Earnings Chart)
BHS,Brookfield Homes (Google Yahoo Earnings Chart)
BZH,Beazer Homes Usa (Google Yahoo Earnings Chart)
CHCI,Comstock Homebuilding Comp (Google Yahoo Earnings Chart)
CTX,Centex Corp (Google Yahoo Earnings Chart)
DHI,D.R. Horton Inc (Google Yahoo Earnings Chart)
DHOM,Dominion Homes Inc (Google Yahoo Earnings Chart)
ENV,Cet Services Inc (Google Yahoo Earnings Chart)
GFA,Gafisa SA ADR (Google Yahoo Earnings Chart)
HOV,Hovnanian Enterprises A (Google Yahoo Earnings Chart)
KBH,Kb Home (Google Yahoo Earnings Chart)
LEN,Lennar Corp Cl A (Google Yahoo Earnings Chart)
LEN.B,Lennar Corp Cl B (Google Yahoo Earnings Chart)
MDC,M.D.C Holdings Inc (Google Yahoo Earnings Chart)
MG631,Residential Construction (Google Yahoo Earnings Chart)
MHO,M/i Homes Inc (Google Yahoo Earnings Chart)
MTH,Meritage Homes Corp (Google Yahoo Earnings Chart)
NVR,Nvr Inc (Google Yahoo Earnings Chart)
OHB,Orleans Homebuilders Inc (Google Yahoo Earnings Chart)
PHM,Pulte Homes Inc (Google Yahoo Earnings Chart)
RYL,Ryland Group Inc. The (Google Yahoo Earnings Chart)
SPF,Standard Pacific Corp (Google Yahoo Earnings Chart)
TARR,Tarragon Corp (Google Yahoo Earnings Chart)
TOA,Technical Olympic Usa Inc (Google Yahoo Earnings Chart)
TOL,Toll Brothers Inc (Google Yahoo Earnings Chart)
WCI,Wci Communities (Google Yahoo Earnings Chart)


Pradeep Bonde said...

HOV is already running, up 5% since open.

Jack said...

Nobody's at "home" at BHS option chain. July-Dec.

No one to sell to.


Pradeep Bonde said...

Look at the group. I saw HOV in first few minutes of open getting volume, jumped, now it is up 10%. Similarly MDC up 1.80 dollar. These are short duration free money trades.

Jack said...


Tom said...

ENV is not a correct symbol. If the company name is correct, the symbol is CETR, which is a company trading at 20 cents and is about to be delisted from the AMEX.

StockRake said...

I went into some BZH call options. KBH was another that was widely being bought today. Extreme oversold charts in most of the home builders...MTH was another one I was looking at.