Why Shares of KB Home Jumped

Is this meaningful or just another movement?

Mar 19, 2014 at 3:17PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of KB Home (NYSE:KBH) climbed as much as 11% today after the company turned in a strong first-quarter earnings report.

So what: The homebuilder said its bottom line swung from a per-share loss of $0.16 a year ago to a profit of $0.12, beating estimates of an $0.08 profit. Revenue improved 11% to $450.7 million, better than the expectation of $435.3 million. Average selling price improved 12% thanks to a shortage of shovel-ready land, All regions were strong except the West Coast, where a slowdown caused a slight decline in total homes delivered from 1,485 to 1,442. Management said it was able to boost profit by "targeting attractive, land-constrained locations."

Now what: The company backlog improved 4% to 2,880, and potential future housing revenue increased 21% to $851 million. This was the company's first profitable first quarter since 2007, and overall housing numbers remain strong. The country's No. 1 homebuilder, D.R. Horton, has predicted a "very strong" selling season in spring, which is traditionally the industry's strongest, and KB said it's well positioned "with more communities open in attractive locations across the country." I'd expect another solid report when we hear next from the homebuilder three months from now.

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Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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