(This is an excerpt from an article I originally published on Seeking Alpha on November 5, 2013. Click here to read the entire piece.)
Three months ago I wrote about about a disconnect that I perceived between investor assessments of Whirlpool (WHR) versus homebuilders like Tri Pointe Homes (TPH). {snip}
Fast forward to November 4th and the same disconnect exists and in some cases is even larger. In a timely article, Jim Cramer of TheStreet.com wrote an article on what he calls the “The Dichotomy in Housing.” {snip}
Cramer includes Whirlpool in his list of housing-related stocks that are doing well because of spending on one’s home. So, I went back to WHR’s latest earnings conference call on October, 22, 2013 for confirmation of Cramer’s premise.
Management expressed the same themes that have recurred over the past year. WHR remains bullish on demand and raised guidance again. Management also made some VERY surprising observations and assessments about the housing recovery that I did not expect to see. It turns out that WHR is not bearish on home construction like Cramer. Moreover, WHR expects to benefit directly from new home construction. Essentially, the housing recovery looks fine from Whirlpool’s perch. Here are the choice quotes from the Seeking Alpha transcript (emphasis mine):
{snip}
Source: FreeStockCharts.com
Investors once again rewarded WHR but ignored the homebuilders.
While I am pleasantly surprised to read WHR’s commentary, it has not reconverted me into a raging bull…{snip}
Be careful out there!
(This is an excerpt from an article I originally published on Seeking Alpha on November 5, 2013. Click here to read the entire piece.)
Full disclosure: long TPH