Mr. Kim: I cover the homebuilders and the building products companies. I cover 13 homebuilders; I also cover Black & Decker (BDK), Masco (MAS), Stanley Works (SWK) and Tempur-Pedic (TPX), the mattress company.
TWST: Let's look at the homebuilder space. How have these stocks done so
far this year? We keep hearing about a housing bubble and the fear of
its consequences. Has that affected the stocks' performance?
Mr. Kim: The stocks have done quite nicely this year. Between February
and May they underperformed the market, but they are up nearly 40% YTD.
TWST: What's driving that?
Mr. Kim: Earnings, primarily. The companies have also benefited from
some modest p/e expansion. However, most of the gains have occurred
through upward EPS revisions.
Tickers included in this excerpt: BDK, DHI, LEN, MAS, SWK, TPX
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