Ticker Shock: Centex, Pulte on the Ropes; MGM, Aetna Still in the Fight
Wednesday's top stories and stocks with potential to move.
The Nikkei popped more than 7%; in Europe, the FTSE is showing me some green. A welcome change, that's for sure!
By the way, keep your eyes peeled for what I hope will be a half-point interest-rate cut today.
As I'm sure you all know by now, we got off to a slightly lower open here in the States, but things have since gone green.
Now let's get down and dirty.
The Texas-based homebuilder released its second quarter earnings after the close on Tuesday. It lost $1.62 a share from continuing operations. The good news: That was actually an improvement over the $5.27 per share loss from continuing ops it turned in during the comparable period last year. Some on the Street were looking for a $0.94 per share loss.
I like the company, and I think the stock has the potential to ultimately make a long-term comeback. But right now, it's like a cornered prizefighter who's simply fending off punches and trying to make it to the bell. And so I shall continue to remain on the sidelines - at least until I get a better sense that the tide has turned.
I'd like to see the average revenue per unit shape up, for example: Tthe average revenue per unit declined from $280,816 in the comparable period last year to $247,534 this quarter.
Pulte Homes (PHM)
The Michigan-based homebuilder issued an interesting press release after the close yesterday. William Pulte, its founder and chairman, was apparently forced to sell 760,000 shares due to margin calls. Pulte said, "I never intended to sell these shares and I am very disappointed I had to at this time."
Long story short, I believe him - and I'm glad the company came out and explained what happened. However, by the same token, I'm left wondering why other insiders haven't been loading up on the stock recently. With the exception of what looks like a 1,000-share purchase by a director in early September, the activity has been sparse.
The way I look at it, if the stock were such a great deal, with the shares in fairly close proximity to their 52-week lows, then why aren't more execs bellying up to the bar? And if they aren't, then why should I?
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