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Posted: Wed, Aug 1 2007, 12:00 pm EDT Post subject: Beazer Shares Tumble, Pulling Down Homebuilder Stocks |
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Shares of Beazer Homes USA fell to a 52-week low amid widening concerns about fallout in the housing sector.
The selloff of Beazer shares, which fell as much as 40% to $8.10 at one point, sent ripples throughout the homebuilding sector. Among the stocks falling sharply were: WCI Communities, Hovnanian Enterprises, and WCI Communities.
Over the past few months, stocks in the sector have hit multiyear lows, hurt by poor results and a bleak outlook for the housing market.
With the downward pressure Wednesday, the Dow Jones U.S. Home Construction Index, a barometer of the sector's performance, fell to fresh lows not seen since 2003.
With home sales plunging, homebuilders have been writing down the value of their unsold homes and the land they have bought for future development. The lower value is reflected in each builder's tangible book value -- what a company could get if forced to hold a fire sale.
Before Wednesday's selloff, the bulk of the builders' stocks were trading below the value of tangible book value.
http://www.cnbc.com/id/20072508 |
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