For Immediate Release
Chicago, IL – February 21, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: PulteGroup, Inc. PHM, M.D.C. Holdings, Inc. MDC, Installed Building Products, Inc. IBP, Orion Energy Systems, Inc. OESX and Century Communities, Inc. CCS.
Here are highlights from Thursday’s Analyst Blog:
Building Permits Near 13-Year High: 5 Housing Stocks to Buy
U.S. homebuilding permits rose to a near 13-year high in January, reflecting sustained growth in the housing market and strength that could help the longest economic expansion in history to continue.
However, housing starts declined to 1,567,000 units in January, after rising to a revised 1,626,000 units in the month before. The good sign however is that it still recorded an increase of 21.4% on a year-over-year basis in January.
Overall, the housing market seems to grow at a healthy pace, supported by the Federal Reserve's three consecutive rate cuts in 2019 that lowered borrowing costs.
Building Permits at the Highest Level Since March 2007
On Feb 19, the Commerce Department reported that building permits increased 9.2% to 1,551,000 units in January, the highest level since March 2007. Building permits were driven by gains in both single- and multi-family housing segments and surpassed the consensus estimate of 1,459,000 units.
Additionally, building permits issued in December were also revised to 1,420,000 units compared with 1,416,000 units previously reported.
Single-family homebuilding accounts for the largest share of the U.S. housing market. Per the report, building permits rose 6.4% to a rate of 987,000 units in January, which is the highest level since June 2007. Also, multi-family homes permits increased 14.6% to 564,000 units. Permits for buildings with five or more units hit their highest level since June 2015.
Low Mortgage Rates to Propel Growth
The U.S. housing market has been supported well by low mortgage rate, which led homebuyers to opt for mortgage and refinancing consistently over the past months.
The Federal Reserve made three consecutive interest rate cuts from July to September in 2019, which lowered borrowing cost. According to data from mortgage finance agency Freddie Mac, the 30-year fixed mortgage rate averages 3.47%, the lowest since October 2016.
Fed plans to hold rates steady throughout 2020. This will help the housing industry’s uptrend to continue as home buyers make the most of the low mortgage rates.
5 Must-Buy Stocks
Given the encouraging scenario in the U.S. housing market, we have selected five stocks, which are poised to grow in the near future. What’s more, these stocks carry a Zacks Rank #1 (Strong Buy) or 2 (Buy).
PulteGroup, Inc.is engaged in the homebuilding business. The company acquires and develops land primarily for residential purposes; and constructs housing on such land. The company’s expected earnings growth rate for the current year is 17.2% compared with the Zacks Building Products - Home Builders industry’s projected earnings growth of 8.4%.
The Zacks Consensus Estimate for the company’s current-year earnings has been revised 5.4% upward over the past 60 days. PulteGroup sports a Zacks Rank #1 . You can see the complete list of today’s Zacks #1 Rank stocks here.
M.D.C. Holdings, Inc.engages in the homebuilding and financial service businesses. The company is involved in the construction and sale of single-family detached homes to first-time move-up homebuyers through Richmond American Homes.
The company’s expected earnings growth rate for the current year is 17.2% compared with the Zacks Building Products - Home Builders industry’s projected earnings growth of 8.4%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 4.3% upward over the past 60 days. M.D.C. Holdings sports a Zacks Rank #1.
Installed Building Products, Inc.engages in the installation of insulation, waterproofing, fire-stopping, fireproofing, garage doors, rain gutters, window blinds, shower doors, closet shelving and mirrors, and other products.
The company’s expected earnings growth rate for the current year is nearly 21% compared with the Zacks Building Products - Miscellaneous industry’s projected earnings growth of 10.8%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 0.3% upward over the past 90 days. Installed Building Products sports a Zacks Rank #1.
Orion Energy Systems, Inc.researches, designs, develops, manufactures, implements, markets, and sells energy management systems for the individual housing, commercial office and retail, area lighting, and industrial markets.
The company’s expected earnings growth rate for the current quarter is more than 100% compared with the Zacks Building Products - Lighting industry’s projected earnings growth of 18.6%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 27.8% upward over the past 60 days. Orion Energy Systems carries a Zacks Rank #2.
Century Communities, Inc.engages in design, development, construction, marketing, and sale of single-family attached and detached homes. The company’s expected earnings growth rate for the current year is 11.1% compared with the Zacks Building Products - Home Builders industry’s projected earnings growth of 8.4%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 5.1% upward over the past 60 days. Century Communities carries a Zacks Rank #2.
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