Bull’s Eye Report: PulteGroup (PHM)

Buy this homebuilder at current levels or a pullback to $19.10

   

At StateoftheMarkets.com, we strive to “own the best and ignore the rest” in our equity portfolios. Toward this end, each day we search our database for a “top stock” (a top rated company in terms of earnings strength as well as company and industry performance) that presents a strong technical “set up” and a good entry point.

In short, when our equity team is looking to add a stock to one of our portfolios, the “bull’s eye” stock shown below is generally their first choice.

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Company Symbol Industry Stock Rating YTD% Gain S.T.
Stop Loss
PulteGroup Inc PHM Homebuilding 9.9 +4.68% $19.01

Why We Like The Stock:

PulteGroup (NYSE:PHM) is our most compelling buy today due to the fact that it is a “top-rated stock” (in terms of earnings strength and company/industry performance) in the top-rated sub-industry, Homebuilding. Along with other Homebuilders like Ryland Group (NYSE:RYL), D.R. Horton (NYSE:DHI), NVR (NYSE:NVR), and Lennar (NYSE:LEN), PHM has exhibited considerable strength since the beginning of 2012. Homebuilders have been trending higher for some time, so any pullbacks make for good entry points. PHM has pulled back from its highs at $21.97 back down to its current price around $19.45. The stock looks to be basing, and the technical chart is a beautiful setup. With a tight stop around $19.01 to limit the potential downside, PHM is a compelling buy and hold up to ~$22.00, which is the next point of resistance.

We Would Be Buyers:

At the current price (~$19.25), or on a pullback to $19.10.

Company Profile:

PulteGroup, Inc. is a homebuilder in the United States. The Company’s subsidiaries engage primarily in the homebuilding business. PulteGroup also has mortgage banking operations, conducted principally through Pulte Mortgage LLC, and title operations. Homebuilding, its core business, includes the acquisition and development of land primarily for residential purposes within the United States and the construction of housing on such land. Homebuilding offers a product line to meet the needs of home buyers in its targeted markets. The Company also has one segment for its financial services operations, which consist principally of mortgage banking and title operations. Its Financial Services segment operates generally in the same geographic markets as its Homebuilding segments. During the year ended December 31, 2011, it originated mortgage loans for 62%. Centex Corporation and Pulte Mortgage are the wholly owned subsidiaries of the company.

Stock Rating: 9.9

The Stock Rating indicates the combined score of our proprietary Earning Strength and Company Performance models. The rating scale is 0 – 10 with 10 being the highest.

PulteGroup – Last Three Months

phm 1 300x168 Bulls Eye Report: PulteGroup (PHM)
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PulteGroup – Last 12 Months

phm 2 300x168 Bulls Eye Report: PulteGroup (PHM)
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PulteGroup – Last Five Years

phm 3 300x168 Bulls Eye Report: PulteGroup (PHM)
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At the time of publication the editor and affiliated companies own the following positions: None

Note: Positions may be bought or sold while this publication is in circulation without notice.


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