Housing Moves: Zillow, KB Home, And LGI Homes Put On A Show

Housing-related stocks continue to show signs of a return of buying interest. I keep tabs on these “housing moves” as checks on the health of the sector. These moves are of particular interest now that investors are actively worrying about a housing slowdown just as the stocks of home builders launch into their seasonally strong period of performance.

Zillow Group (Z) or (ZG)

The week started with the startling news that Zillow Group Director J. Hoag spent a whopping $24.8M to buy 850,000 shares of Zillow stock. Executive Chairman and co-founder Richard N. Barton spent $19.4M on 703,497 shares. The stock responded with an 11.9% gain that has all the looks of a bottom for Zillow. Given that Hoag bought shares on November 21st and 23rd, Zillow should hold this bottom between $28 and $30 for the thesis to hold. I am a buyer on dips from here. (Note well that as of the time of typing, the company has not filed any related disclosures with the SEC on these purchases.)

Zillow Group (Z) is starting to push into its post-earnings gap down following an 11.9% surge on news that a director loaded up on 850K shares.

 

Zillow Group (Z) is starting to push into its post-earnings gap down following an 11.9% surge on news that a director loaded up on 850K shares.

KB Home (KBH)

The rebound in KBH shares is one of the most encouraging signs of the current cycle for the stocks of home builders. KBH never closed lower after the day it delivered an awful earnings warning and has now completely reversed its post-warning loss. The next and immediate hurdle is downtrending resistance from its 50-day moving average (DMA) and the prior peak this month. I am a buyer above those levels.

KB Home (KBH) this week finished filling the gap down from its earnings warning.

 

KB Home (KBH) this week finished filling the gap down from its earnings warning.

LGI Homes (LGIH)

On no new news that I could find, LGIH popped “out of nowhere” for a 7.8% gain. This move pushes LGIH close to a complete reversal of its post-earnings loss. The stock is also now making a strong push above its downtrending 50DMA resistance. I will get bullish on LGIH after it closes above the intraday high from the first day of the post-earnings reaction ($47.44). It is VERY possible that bears are finally taking profits here; shorts are a substantial 23.6% of LGIH’s float.

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Full disclosure: no positions

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