{"id":9602,"date":"2012-02-04T14:23:08","date_gmt":"2012-02-04T19:23:08","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=9602"},"modified":"2012-02-04T14:23:08","modified_gmt":"2012-02-04T19:23:08","slug":"kb-homes-sweet-spot","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2012\/02\/04\/kb-homes-sweet-spot\/","title":{"rendered":"KB Home’s Sweet Spot"},"content":{"rendered":"

(This is an excerpt from an article I originally published on Seeking Alpha on January 31, 2012. Click here to read the entire piece<\/a>.)<\/strong><\/p>\n

{snip} It turns out that there is yet one more reason for buying the dips in KBH. The company is second only to Meritage Homes Corporation (MTH) for the percentage of homes built in states that do not require a lender to first file a lawsuit against a homeowner to initiate a foreclosure process. In other words, when it comes to battling under-priced foreclosures, KBH is building in a sweet spot. CNBC put together the following data from Lender Processing Services (LPS is another stock on my buy list<\/a>):<\/p>\n


\n
\"Meritage<\/a>
Meritage Homes and KB Homes are concentrated in non-judicial states<\/figcaption><\/figure>
\nSource: CNBC<\/a> (January 20, 2012)<\/strong>
\n<\/center><\/p>\n

{snip}… if I am proven over-optimistic using the tentative assessment that this swell of foreclosures now represents an inordinate amount of low quality inventory, it should help to own stock in a homebuilder who will suffer the least from this overhang. <\/p>\n

Interestingly enough, Meritage Homes as consistently out-performed KBH, especially in the last two years. <\/p>\n


\n
\"Meritage<\/a>
Meritage has outperformed KBH for at least the last three years<\/figcaption><\/figure>
\nSource: StockCharts.com<\/a><\/strong>
\n<\/center><\/p>\n

Finally, this CNBC segment presented 2011 year-end data that clearly demonstrate that housing has yet to carve out and confirm a bottom:<\/p>\n