Lennar (LEN):
 “The roof, the roof, the roof is on fire…”

That song pops into my head lately when I think about homebuilders and all the money they’ve been losing.

This leads me to Lennar’s second-quarter earnings results. In the period ended May 31, it posted a loss of $0.76 a share. The release points out that this “includes a $0.38 per share charge related to valuation adjustments and other write-offs; and a $0.27 per share charge related to a non-cash deferred tax asset valuation allowance.”

Whoop de doo.

1. Education and experience tell me it probably makes sense to buy into the major homebuilders before the proverbial tide takes a big turn. But I’m not so sure the tide's going to take a meaningful turn anytime soon, so I’m generally unwilling to go out on a limb here.

2. Its backlog is down about 48% from the comparable period last year, which I think speaks volumes. (Yes, I realize the number is up from the first quarter, but I’m not willing to take the plunge based on that.)

3. If anyone needs any red ink, back up the truck -- going forward, there’s plenty expected here.

4. With the stock in the mid to upper single-digits, I'd sure like to see insiders building a big position right here and now in the open market. (Though I do recognize that some stepped up to the plate late last year.)

5. Where’s the big catalyst going to come from now? I don't think interest rates are going to go much lower, nor do I believe herds of consumers are itching to plunk down hundreds of dollars on deposits.

So basically, even if they build it, I won’t be coming anytime soon.

Hertz Global Holdings (HTZ):
 The big-name rental-car company was out with some guidance earlier this morning. 

It weighed in with its outlook for the second quarter and the year. Per the release:

“For the second quarter 2009, the Company forecasts worldwide revenues in the range of $1.70 to $1.75 billion, Corporate EBITDA in the range of $260 million to $270 million, adjusted pre-tax income in the range of $65 to $70 million and adjusted diluted earnings per share in the range of $0.09 to $0.10. For the full-year 2009, the Company forecasts worldwide revenues in the range of $6.7 to $7.0 billion, Corporate EBITDA in the range of $900 million to $935 million, adjusted pre-tax income in the range of $100 to $120 million and adjusted diluted earnings per share in the range of $0.12 to $0.15.” 

This looks like pretty good news as the estimate I’m seeing for the second quarter is a penny a share, and a pretty hefty loss of $0.23 a share for the full year.  

This could turn out to be a nice trade here, but I'm reluctant to build a longer-term position as I don’t think it's going to be turning in any huge numbers on the earnings front next year.

Have a great day!