Hot Money Says a Housing Turn is Coming Soon
By:
TraderMark Thursday, September 11, 2008 9:54 PM
We've been talking about the strength in homebuilders of late ... but I wanted to point out the divergence between recent data for another group of stocks and their charts. The data points say "no recovery" and the executives in many cases say "no recovery" but that doesn't stop hot money from piling in, assuming a "recovery in 6 months". Maybe it's true, maybe it's not. If March 2009 marks the bottom in housing I'll come on and say "I was wrong - what an idiot I was, the American consumer is far better than I imagined." But it really doesn't matter if March 2009 will be a bottom because people are making money assuming so today - perception is reality. Remember, there is so much institutional money now, to make any real money, you need to out anticipate the out anticipators and buy ahead of everyone else it appears. Well ahead.
#1
Quanex Building Products (NX) -
from last earnings report in August
- Quanex Building Products Corp. on Thursday lowered its forecast for operating income for the fiscal year that ends in October, citing weakness in its aluminum business. Quanex said it expects to generate about $75 million in operating income for the fiscal year, down $5 million from the previous forecast, due mostly to weakness in its Nichols Aluminum unit, where shipped pounds in the third quarter fell 11 percent from a year ago.
- Chief Executive David D. Petratis said the company is still in "a very difficult housing market" and doesn't expect any near-term improvement in the situation.
- Houston-based Quanex updated the outlook as it released results for its fiscal third quarter, in which profit plunged to $8.8 million, or 24 cents per share, from $38.6 million, or 98 cents per share, a year earlier. Sales also declined to $240.3 million from $269.5 million a year earlier.
The stock market says the CEO is wrong in his assessment and things are turning around soon, as the stock is a forward looking indicator
#2
Whirpool (WHR) -
from earnings report in July (and yes commodity prices have dropped a bit since)
- Household appliance maker Whirlpool Corp.
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