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Home builder's big slide likely to have long run; Housing market's rout hits Hovnanian; cheap stock no bargain.(Hovnanian Enterprises Inc.)
Crain's New York Business, October, 2006 by Elstein, Aaron
Byline: Aaron Elstein The ground is giving way beneath Hovnanian Enterprises Inc. The home-building giant's sales are shriveling, while cancellation rates and unsold inventory soar. No wonder shares of the Red Bank, N.J.-based company have shed 42% of their value in the past year, closing on Friday at $29.34, a paltry five times the company's per-share earnings over the past year.
That price looks cheap but is certainly no bargain. Investors should not try to catch a falling knife here. The housing market is in serious trouble. Home builders are starting to resemble automakers in that they're sweetening deals with huge incentives to get consumers in the door. But such come-ons are expensive. Hovnanian's sales and earnings are expected to take it on the...
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