All signs point to a housing market that is finally gaining momentum.
With existing-home sales increasing in April and Ben Bernanke, chairman of the Federal Reserve, pointing to the housing market as a positive economic indicator of growth, housing is alive and kicking.
And yet, Wall Street is singing a different tune when it comes to three homebuilder stocks.
Hovnanian Enterprises [stock HOV][/stock], Skyline Corporation [stock SKY][/stock] and Xinyuan Real Estate [stock XIN][/stock] aren’t trading too pretty on the screens these days.
For instance, Xinyuan Real Estate is down 22% from a 52-week high and is currently trading down 1.1%.
What factors are causing these stocks to miss out on the housing market uptick?
Well for one, Xinyan Real Estate recently announced that its chief financial officer, Tom Gurnee, plans to retire from his post in August, leaving the seat vacant.
The company has formed a search committee to determine a successor.
Hovnanian has witnessed a strange retraction on the stock market, even given the good news provided in housing data reports — thanks to limited inventories and resilient sales driving orders for builders.
For instance, the company reported a net loss fro the three months ended Jan. 31 at $11.3 million, compared with $18.7 million. And while it’s a narrower loss, the company is still facing relatively high debt costs.
Skyline’s first quarter 2013 earnings were less than impressive, as the company reported a 14.5% drop in net profit margin. Meanwhile, the return on average assets dropped 29.6% in the first quarter.
The bottom line is that while these homebuilders are witnessing better performance than in recent years, they are still missing out on the bright spot in the overall economy, housing.
