KB Home (KBH)

Looks a bit expensive based on PE ratio. Valuation is a bit stretched. You are going to have fits and starts in the US housing market.

Likes the US housing space. This has come off pretty hard here. Doesn’t know if right now is the time. Seeing major negative sentiment readings on US homes and it is right down towards its bottom. Thinks this is a good space to get into right now. Over the next 3 years, we are more likely to see a growth scenario play out in the US, rather than a deflation scenario.

First and foremost, you want to have a view on what you think is going to happen to new US housing. This company had a great, great run coming out of the bottom of 2008. Now it is subject to profit taking. Prefers Tricon Capital Group (TCN-T).

Thinks it is fairly early in the game for homebuilders. This company came home with very good results this morning and surprised the Street a little bit on revenues and on earnings. Average house prices are up 12%. They are mostly a Southwest US operation with a lot of business in California.

One of the major US homebuilders. They have all done extremely well. This had a selloff recently because of the threat of tapering. Cyclical, but a longer-term cycle. With the foul weather out of the way and the bad news from tapering already priced in, there is still a lot of ground to be made up. Cheap financing is still in place. This should be okay until such time as we actually see a rise in interest rates.

Looks like it's trying to build up again, but looks like there is some danger in the short term. Looks a bit stressed.

(Market Call Minute) Although housing starts took a bit of a pause, we could see an upswing. Maybe next year.

When interest rates suddenly spiked, it was a perfect opportunity to step in. Lots of opportunity to expand. The next leg up is on fundamental growth.