1-Star Stocks Poised to Plunge: Pulte?

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Based on the aggregated intelligence of 135,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, embattled homebuilder Pulte Homes (NYSE: PHM) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Pulte's business and see what CAPS investors are saying about the stock right now.

Pulte facts

Headquarters (founded)	Bloomfield Hills, Mich. (1956)
Market Cap	$2.32 billion
Industry	Residential Construction
Trailing-12-Month (TTM) Revenue	$5.41 billion
Management	Founder/Chairman William Pulte President/CEO Richard Dugas Jr.
Return on Equity (average, last five years and TTM)	(8.5%) and (43.4%)
Competitors	Lennar (NYSE: LEN) D.R. Horton (NYSE: DHI)
CAPS Members Bearish on PHM Also Bearish on	KB Home (NYSE: KBH)
CAPS Members Bullish on PHM Also Bullish on	General Electric (NYSE: GE) Apple (Nasdaq: AAPL)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS.

Over on CAPS, fully 794 of the 1,285 members who have rated Pulte -- some 62% -- believe the stock will underperform the S&P 500 going forward. These bears include All-Stars floridabuilder2 and MattH42004, both of whom are ranked in the top 0.5% of our community.

In late April, floridabuilder2 voiced concerns over Pulte's recent purchase of rival Centex (NYSE: CTX):

Pulte gains nothing from this acquisition. Their stupidity has not hurt them before, but you can only make so many dumb moves. I believe this is nothing more than a move to cover overheads and get SG&A down. Pulte is going after market share and moving into D.R. Horton's game … both of them are wrong, but they are lucky because Lennar is in worse shape.

In a more recent pitch from last week, MattH42004 builds on that bearishness:

At the beginning of 09' Pulte had a 3.2 billion dollar debt load, with over 1 billion coming due in the next 5 years and was hemorrhaging cash. Meanwhile, Centex had a 3.3 billion dollar debt load, with over 1.5 billion coming due in the next five years and was also bleeding cash. So what did they decide to do? Take a flying leap into each others arms and create a massive, debt-riddled, cash-burning example of everything that was wrong with the housing bust. Congratulations! Oh, and I'm sure all of that shadow inventory the banks are keeping off the market will work wonders for the homebuilders in the coming years. Yay homebuilders!

What do you think about Pulte, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 135,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.