Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, homebuilder PulteGroup (NYSE: PHM ) has received the dreaded one-star ranking.
With that in mind, let's take a closer look at PulteGroup's business and see what CAPS investors are saying about the stock right now.
PulteGroup facts
| Headquarters (Founded) |
Bloomfield Hills, Mich. (1956) |
| Market Cap |
$2.1 billion |
| Industry |
Homebuilding |
| Trailing-12-Month Revenue |
$4.06 billion |
| Management |
Chairman/CEO Richard Dugas, Jr.
CFO Robert O'Shaughnessy
|
| Return on Equity (Average, Past 3 Years) |
(33%) |
| Cash/Debt |
$1.14 billion / $3.38 billion |
| Competitors |
D.R. Horton (NYSE: DHI )
Lennar (NYSE: LEN )
Toll Brothers (NYSE: TOL )
|
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 54% of the 1,274 members who have rated PulteGroup believe the stock will underperform the S&P 500 going forward. These bears include All-Stars ibarz and Chemdawg, both of whom are ranked in the top 5% of our community.
Just last month, ibarz succinctly summed up the PulteGroup bear case: "No market for new houses. Zero. Wait till at least 2 years."
Currently, PulteGroup even sports an alarming debt-to-equity of 176%. That's higher than that of competitors like D.R. Horton (73%), Lennar (125%), and Toll Brothers (63%).
CAPS All-Star Chemdawg expands on the underperform argument:
[S]till losing money ... but the market is flattening out and buyers will be starting to buy again ... but existing homes will go first and there are still quite a few of them left. [U]ntil then I am bearish on [PulteGroup] since they are still losing money ... if you want a homebuilder with a profitable business, take a look at [Lennar], not only are they profitable (even in Florida), but they replaced any of their homes that were built with Chinese Drywall for free and that makes the quality and reputation hard to beat.
What do you think about PulteGroup, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!
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