Which Home Building Stocks Have the Strongest Earnings Trends?

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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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