Which Home Building Stocks Have the Strongest Earnings Trends?

January 20, 2013

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Earnings trends are extremely important when evaluating stocks. At Wall St. Cheat Sheet, we view increasing earnings quarter-over-quarter as a simple way to gauge whether costs and the business model are stable. Then we like to analyze whether the company is outperforming peers in the sector. This is what we call the “E-Squared” investment analysis (‘E = Earnings Are Increasing Quarter-Over-Quarter’ + ‘E = Excellent Relative Performance Versus Peers and Sector’).

Here’s your Cheat Sheet to how the top 5 Home Builders’ Stocks rank via earnings trends:

5) KB Home (NYSE:KBH): Current Price $

Fiscal Year	2008	2009	2010	2011	2012
Revenue ($) in millions	3,034	1,825	1,590	1,316	1,560
Diluted EPS ($)	-12.59	-1.33	-0.90	-2.32	-0.76

While the other builders appear to have wiped the red ink from their income statements, KB Home is still losing money.

Quarter	Nov. 30, 2011	Feb. 29, 2012	May. 31, 2012	Aug. 31, 2012	Nov. 30, 2012
Revenue ($) in millions	479.87	254.56	302.85	424.50	578.20
Diluted EPS ($)	0.19	-0.59	-0.31	0.04	0.10

For the last three quarters KB Home has been growing its EPS steadily. Keep this one on your watch list given that earnings have increased quarter-over-quarter. But there are stronger stocks to analyze…

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