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 homebuilder KB Home
So what: "Good news" and "homebuilders" are two things that don't seem to go together these days. But that's exactly why just a glimmer of good news from Lennar was able to send KB Home shares spiking. Though Lennar's profit fell nearly 6% for the fourth quarter, revenue rose 11% and the average sales price rose slightly.
Now what: Is this a good sign for the sector? Sure it is. But I'm not convinced that the reaction from KB's shares is warranted. The housing market still has a long road ahead before homebuilders are out of the woods, so I can't see myself rushing to buy after a single data point -- particularly when it's a data point that's not even from KB.
Want to keep up to date on these stocks?
Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
Fool contributor Matt Koppenheffer has no financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter, @KoppTheFool, or on Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.
More from The Motley Fool
KB Home Gets 1 Step Closer to Management's Goals
The homebuilder's streak of impressive earnings results puts it on the cusp of meeting management's targets for returns.
What Happened in the Stock Market Today
On a positive for day the major benchmarks, shares of KB Home rose on strong sales, and Progress Software soared after reporting earnings.
KB Home (KBH) Q4 2017 Earnings Conference Call Transcript
KBH earnings call for the period ending November 30, 2017.