Open trade in NEN

[chump]

Just reviewing the numbers and rational on this trade and I still don't get the 'need' to buy in here...here are the numbers presented (whether they are FA or TA is irrelevant they're still just numbers)

Entry Price .................................$75.80
Position .....................................500 shares
Stoploss....................................No stoploss
Exit Target.................................$227.76

Chart shows it's all time high just under $100

here's your rational and concerns

"And this is the point.
I want to buy it CHEAP.
Later, when the price rises, it gets risker, as it is getting more expensive." (by the way I don't agree with the definition of risk you are using here at all ..see below)

"Because this volume is so low, this might jump $5 on 1 trade and never look back."

"My concern is that it is a SMALL COMPANY.
It has huge debt...........90% of it's market cap is debt. ( in the form of property, thus recoverable )
This is why the common can perform so well.........a la General Motors.
The cash per share, is illusion, as this debt would swallow that if a meltdown came.
In a Bankruptcy, the odds on the Common surviving would be LOW."

So here we are...you have a fundie based profit target of $227 per share ..an existing all time high of $100 per share (so you are going with the trend)....an investment of approx $35,000 from an entry about $75 per share ...and you are concerned (rightly so) that a very small company like this getting caught up in a bigger market downstream could get written down to nothing and yet you are bothered about the prospect of a $5 move to the upside leaving you behind .....seriously if you can't see the problem with this then I'm not sure I can paint it any clearer..
Bottoms hardly ever simply reverse on a pinhead because opposing views on fear and disbelief meet at those places . Typically waiting for a $5 move or a couple of those in tandem would seem to me to make more sense as 'concrete' evidence that there might be at least a couple of other parties out there like you watching this stock with the same view that you have..unfortunately buying in at this time seems to me to indicate that you don't yet have any company at all on that view...that is not being contrarian ..it's being reckless (and I use that word only in relation to risk assessment)...

Can't really add anymore to discussing this trade

 

[roguetrader]

Roguetrader,

I was typing a post yesterday with a minimum share price included and then I thought better of it and cancelled the post. As such, my answer also has to be no.

Now that I find quite interesting, given what has been said, particularly on another thread I was under the impression that to come up with a price was impossible, but by the very fact that you started to type such a post suggests that you have some measure that you could apply.
From a technical perspective, (bearing in mind that I do not feel TA would be a great deal of use in analysing this stock, but rather as an experiment) I would be surprised if the stock fell below $50. Reasoning being that the stock range traded for about a year between $50 - $60, and the bulk of the volume relatively over the last 3 yrs came in above this level.

 

[LION63]

Roguetrader,

The price was based on the fact that some of the cash has already been spent and once the share price falls slightly below the balance vultures will liquidate the company and strip it bare. It has nothing to do with an entry/exit point.

 

[roguetrader]

Roguetrader,

The price was based on the fact that some of the cash has already been spent and once the share price falls slightly below the balance vultures will liquidate the company and strip it bare. It has nothing to do with an entry/exit point.

A compelling prospect.

 

[ducati998]

Chump

Just reviewing the numbers and rational on this trade and I still don't get the 'need' to buy in here...here are the numbers presented (whether they are FA or TA is irrelevant they're still just numbers)

And here is where we diverge.
The numbers are just numbers to the technical crowd. That is to say, $75 has no more or less relevance than $55 or $105.

However, to a Fundie, there is a world of difference between $75 and $55 or $105. As a simple illustration, regarding price differential, NEN has a $2.80 dividend rate. at $75 the yield = 4%, at $100 the yield = 3%

So here we are...you have a fundie based profit target of $227 per share ..an existing all time high of $100 per share (so you are going with the trend)....an investment of approx $35,000 from an entry about $75 per share ...and you are concerned (rightly so) that a very small company like this getting caught up in a bigger market downstream could get written down to nothing and yet you are bothered about the prospect of a $5 move to the upside leaving you behind .....seriously if you can't see the problem with this then I'm not sure I can paint it any clearer..

Every stock has a Quantitative & Qualitative analysis that highlight strengths and weaknesses of the issue. Conceivably, a low QUALITY stock, may at the right price ( QUANTITATIVELY ) become a buy.

What constitutes a low quality stock?
One that lacks stability. ( Usually determined from the business model )
But, as previously mentioned, if the price is low enough, the risk, of poor quality may be offset enough, that it becomes a buy.

The "existing all time high" has no relevance to me at all.
The chart picture, of a trend, has no relevance to me at all.

Your belief that an entry here represents risk, while waiting for "chart confirmation" and giving up $5 in purchase price, clearly illustrates the "faith" imbued in a chart pattern.

The price chart is worthless.
It has so many failings, that it becomes positively dangerous to place a trade on the information provided. Thus the NECESSITY of a stoploss.

So how do I assess risk, and how do I manage the risk I assume?
I assess risk through the "numbers", taken from the Financial Statements.
This risk assessment provides a part of the risk management, the additional component is through the "Insurance" technique of DIVERSIFICATION.

Typically waiting for a $5 move or a couple of those in tandem would seem to me to make more sense as 'concrete' evidence that there might be at least a couple of other parties out there like you watching this stock with the same view that you have..unfortunately buying in at this time seems to me to indicate that you don't yet have any company at all on that view...that is not being contrarian ..it's being reckless (and I use that word only in relation to risk assessment)...

Again, waiting for confirmation by "OTHERS" is not necessary.
Technical Analysis requires that "someone" provides leadership. That is everyone looks to "someone" to say, through their buying, hey guys, this ones ok.

I do not need "others" to provide that security blanket. I am right because my data, reasoning, and analysis are correct, not because others agree or disagree.

This is exactly what being "Contrarian" means.
If you wait for others to lead the way, you have joined the herd.
Once you join the herd, you are locked into the herds decisions, or whoever leads the herd.
I on the other hand, buy & sell only when I wish to. The market serves me, not I the market.

cheers d998

 

[JumpOff]

Technical Analysis requires that "someone" provides leadership. That is everyone looks to "someone" to say, through their buying, hey guys, this ones ok.

Are you planning to buy enough of this to stop the price falling? Will continue to buy each time it tries to go lower? Are you then willing to buy enough to push it back above the all time high?
JO

 

[ducati998]

Jo

Are you planning to buy enough of this to stop the price falling? Will continue to buy each time it tries to go lower? Are you then willing to buy enough to push it back above the all time high?

No, I've bought all that I'm going to buy.
There are risks with this stock. And some have been highlighted.

What the technical crowd are concerned about is "MARKET RISK".
Market risk, would only be a problem if I HAD to sell tomorrow, assuming I can make my own selling decision, then market risk is irrelevant.

I am only interested in the Business risk.
Cheers d998

 

[chump]

Mr D,
You are completely missing my point..I am not talking about herd nonsense ..that has to be the most misunderstood cherry out there..I am talking about having any idea whatsoever that your view of this company is shared by anyoneelse on this planet..because if itsn't your trade/investment is not going anywhere .whether you like it or not you do not exist in a vacuum and your view alone will not move this stock where you think it should go ....the only way you will find out if that is possible is if there is any buying action on this stock that mirrors your view..and buying action is simply that ..it's got nothing to do with the way you organise that information via TA or FA...count it in chocolate buttons if it makes you feel happier..
I think our views are so radically different we are unlikely to move into an area of agreement over issues like this so let's leave it and move on..Luck with your trade

 

[LION63]

Fair value is a personal view point in fundamental analysis, one does not rely on the market to dictate entry or exit. The price that others give this particular stock at this point is of no major relevance as to how long the price might remain static, it is a mute point because no one has a crystal ball.

Good fundamental analysis is based on being able to make sound judgement based on information to hand irrespective of what other market participants may or may not be doing.

 

[roguetrader]

Your belief that an entry here represents risk, while waiting for "chart confirmation" and giving up $5 in purchase price, clearly illustrates the "faith" imbued in a chart pattern.

Ducati, I think what Chump means and I also see his point is that giving up $5 for some sort of confirmation that the selling has stopped, given the expected upside is a small price to pay. WWhether you use charts to see that or whatever is rather irrelevant.

=ducati998I do not need "others" to provide that security blanket. I am right because my data, reasoning, and analysis are correct, not because others agree or disagree

Yes but unless as JumpOff says, you are prepared to buy it up yourself you will require others to agree. Stock prices are moved by agregate agreement. The majority agree that it is a good buy they buy and it goes up, and vice-versa.

Once you join the herd, you are locked into the herds decisions, or whoever leads the herd.

I'm sure the concept of not being in the "herd" is very James Dean, but the simple fact is that before it goes anywhere the herd must join, and then you will be with them, like it or not.Your herd will be small on this one but a herd nonetheless You will of course not be locked in with them, much the same as any other trader is not.

Once you join the herd, you are locked into the herds decisions, or whoever leads the herd.

D, you sound like some sort of activist, a fanatic fighting some sort of idealistic cause, I don't know where you get some of your ideas from slipstreaming the "herd" does not sign you up to some secret binding agreement that you must follow their every move.

 

[roguetrader]

one does not rely on the market to dictate entry or exit.

Well perhaps one should then one would not be sitting in a position going nowhere for months waiting on the rest of the market to see your pick as fashionable. Or worse still holding a position that is still going south for the winter as the rest of the market hasn't finished selling yet.

 

[chump]

Rogue,
thank you ,your explanation was exactly the point that I was trying to make ...in laymans terms it's called 'don't spoil the broth for want of a halfpenny"..in this case the halfpenny could be worth quite a bit in terms of risk reduction

 

[LION63]

Rogue & Chump,

I see the points that you are making and they are right for technical traders. However, fundamental trading is done slightly differently, this is based on the fact that one calculates good value and makes a decision based on that. It might take 10 minutes or 10 years to attain fair value but that is not under our control. Once one starts looking at charts, number of trades and resistance/support levels it is no longer fundamental analysis.

 

[roguetrader]

Rogue & Chump,

I see the points that you are making and they are right for technical traders. However, fundamental trading is done slightly differently, this is based on the fact that one calculates good value and makes a decision based on that. It might take 10 minutes or 10 years to attain fair value but that is not under our control. Once one starts looking at charts, number of trades and resistance/support levels it is no longer fundamental analysis.

Lion you talk about it like, as a fundamental trader it would be a great sin, a violation of a secret code.. Fundamental analysis gives you a great basis for a solid trade / investment, because to the best of your ability you know that the things that will give your company the ability to drive value are in place, or at least appear to be, so if looking at a chart can afford you a confirmatory entry on a timing basis, why not? I realise in this particular stock technical analysis may be of little help, but speaking generally.
As for FA, I have also read books on FA and as I said to Ducati I do not recall any of them advising buying a falling stock, regardless of perceived value.
The concept of buying this here, because "it might just reverse without warning and go up $5" smacks of fear, the fear of missing it, not a good basis for entry into any stock by any methodology

 

[LION63]

Rogue any book that advised buying a falling stock regardless of perceived value would not have made it to your desk. Maybe we should try and view the situation from a slightly different angle.

For one to start looking at the fundamentals of a stock there must have been something to arouse the interest - press release, data, rising/falling share price etc. Once all the available information has been analysed it would be fair to say that a price will be arrived at. If the market price is significantly lower the shares would be bought and if the market price is significantly higher, the shares may be sold. Because this is the criteria, looking at charts is not an option. As most of us agree, the drawback of this type of stock selection is that one might be locked into a stock for an eternity or worse still, the stock might go in the opposite direction first. But that is what trading is about, nothing is perfect.

 

[roguetrader]

Lion I understand what you are saying and fair points, maybe I am cionfusing you with someoe else who has said that of FA and TA, one should not totally disregard or ignore the other.
Whoever that chap was fwiw I agree with him.

 

[ducati998]

Rogue

From a technical perspective, (bearing in mind that I do not feel TA would be a great deal of use in analysing this stock, but rather as an experiment) I would be surprised if the stock fell below $50. Reasoning being that the stock range traded for about a year between $50 - $60, and the bulk of the volume relatively over the last 3 yrs came in above this level.

From a "technical" perspective, I do not disagree.
However, from a Fundamental perspective, the Company has moved on a great deal since that time in respect of assets.

However, the 52week low did fall to around the $59 mark, I just missed it at that level, so you could say I've overpaid by $16 / share already.

The question now becomes, is that level likely to be revisited anytime soon?
Had I seen it at $59, I would have bought more shares, as the risk was even lower at that price.

chump

You are completely missing my point..I am not talking about herd nonsense ..that has to be the most misunderstood cherry out there..I am talking about having any idea whatsoever that your view of this company is shared by anyoneelse on this planet..because if itsn't your trade/investment is not going anywhere .whether you like it or not you do not exist in a vacuum and your view alone will not move this stock where you think it should go

Rogue

I'm sure the concept of not being in the "herd" is very James Dean, but the simple fact is that before it goes anywhere the herd must join, and then you will be with them, like it or not.Your herd will be small on this one but a herd nonetheless You will of course not be locked in with them, much the same as any other trader is not.

If that was true, then I might have pause for thought. However this is not the case.
Lets say that the price due to no interest from institutions, or the stock trading public, just stagnated.

Lets also say that business for the company just proceeded in aggregate as it has.
The value of the business would continue to rise through;
1....reinvested earnings
2...increases to earned surplus
3..payment of dividends

Then, with the share price becoming evermore of a bargain, one of several outcomes will supervene................

1......the company will be aquired by merger or aquisition
2.....the business may be taken private
3.....market eventually wakes up

Either one will command a premium on my purchase price, as I bought it cheap. There is nothing to stop me from getting on the phone to someone and saying, hey, you interested in buying my company.

Rogue

you sound like some sort of activist, a fanatic fighting some sort of idealistic cause, I don't know where you get some of your ideas from slipstreaming the "herd" does not sign you up to some secret binding agreement that you must follow their every move.

But that is exactly what technical analysis requires you to do.
You want to trade a reversal, or the bounce, a counter-trend trade.
You enter at your "support" ( or entry criteria ) level.................do you;

1.....set a stoploss, incase price does not bounce ?
2....take the trade knowing at some point your profit will appear ?

LION has answered the next comment, so no need to repeat.
cheers d998

 

[roguetrader]

Rogue
From a "technical" perspective, I do not disagree.
However, from a Fundamental perspective, the Company has moved on a great deal since that time in respect of assets.

However, the 52week low did fall to around the $59 mark, I just missed it at that level, so you could say I've overpaid by $16 / share already.

The question now becomes, is that level likely to be revisited anytime soon?
Had I seen it at $59, I would have bought more shares, as the risk was even lower at that price.

That is a fair point.
As to that question, only time will tell. Selling has decelerated and volumes. at least temporarily have dropped back to more normal levels. but trading so thinly it is difficult to get much feeling from this.

 

[JumpOff]

What the technical crowd are concerned about is "MARKET RISK".
Market risk, would only be a problem if I HAD to sell tomorrow, assuming I can make my own selling decision, then market risk is irrelevant.

It seems to me that you are linking FA with some kind of longer term investment, A.K.A. "buy it cheap, and hold it until it goes up." I expect the difference of opinion comes into play because this site is called "trade 2 win," which is a completely different mind set. Even long term traders are still traders. Traders are merchants - they buy then sell, or sell then buy - looking for the maximum amount of gain for the amount of time their position is open.

I see successful investors as being analogous to the landlord who owns the building where the retail diagnostic clinic is located. The landlord collects rent, and if the building was properly chosen and maintained, it also rises in value over time (sometimes dramatically). The building owner needs to do the fundamental analysis, because the cost of churning buildings is prohibitive compared to the gains, and the owner plans to hold the building for some time. This is all good.

I see successful traders as being analogous to the doctors who run the clinic. The building may be worth 500,000., and the investors' profits are based on that. The doctors with a sound business plan may churn 5 million dollars worth of billable testing kits a year out of the same space. The doctors expect every testing kit bought to be worth more at retail than it costs at wholesale and they continually keep an eye out for the best price. They would never stock months worth of tests that couldn't be sold for more than they cost. If the cost of one test gets out of whack relative to its selling price, the doctors immediately look for another supplier, raise their prices, or direct clients elsewhere for those particular tests. This is all good.

The trader is more actively involved with buying and selling, and expects a higher rate of return than the passive investor.

Now the question is, can traders use FA? There seems to be general agreement that short term traders (however you define that) do not find FA to be very helpful. Intermediate and long term traders probably include some portion of it if they are trading stocks. At some point along the continuum a long term trader becomes an investor, and that's a completely different animal. It's all good.

JO

edit: My choice of a doctor's clinic may not have been ideal here. I expect this kind of profit seeking medical practice may be a bit of a brain warp for those of you who live on the more civilised continent.

 

[ducati998]

Company Focus
Home-building stocks with room to grow


Here are four myths about the so-called housing bubble, and the reality that home-builders have room to grow. Take a look at our watch list of 13 such stocks.

By Michael Brush

It's many an investor's second-favorite topic (right after how much their home's value has appreciated): Why real estate is a bubble that’s about to burst.

The reality, though, is that there are still good investment opportunities in real estate. Instead of joining the chorus of bubble-sayers, investors should look for opportunities to bet on a few reasonably priced home-builders that are poised for several more years of decent growth. Among that group: Centex (CTX, news, msgs), Standard Pacific (SPF, news, msgs) and Beazer Homes (BZH, news, msgs).

Here's a look at why the myths cited by the housing bears are just that, myths:

Myth No. 1: Speculators will doom the boom
Everyone has his own favorite story that proves housing is in a speculative frenzy. Scalpers are flipping lots and houses several times before an owner finally moves in. Real-estate investment clubs have replaced stock clubs. Business-school graduates rank home-builders high on their list of preferred employers -- ominously grabbing a spot once held by Enron. Home prices in hot markets like Southern California and Florida have jumped more than 25% in a year.



But none of these anecdotes, even the ones that are true, prove there's too much speculation. In fact, two characteristics of the housing market make a speculative bubble unlikely.

First, home-builders know speculation works against them. It means they have to compete with speculators to make sales, which hurts their control over the markets and pricing. In contrast, during the tech bubble the people pushing tech stocks (Wall Street analysts, investment bankers and fund managers) had an interest in creating a speculative frenzy so they could sell higher.



So home-builders constantly watch for the telltale signs of speculators so they can weed them out. D.R. Horton (DHI, news, msgs), for example, requires some buyers to sign an affidavit saying they will live in a home for a year after buying it -- or agree to split the profits with the builder if he or she sells sooner, says Donald Tomnitz, chief executive at D.R. Horton. Some home-builders ask real-estate agents to sign affidavits that they are not representing speculators. Others refuse to sell to buyers holding too many mortgages.

Second, unlike a tech stock, a house for most people is more than an investment. It’s a place to create a home and build memories. And transaction costs are high. So there’s a natural resistance to cashing out.

Because of constraints like these, flipping single-family homes for quick profits still accounts for less than 10% of sales nationally, estimates A.G. Edwards & Sons analyst Gregory Gieber. That’s enough to inflate home prices in some markets. But those markets will adjust through long periods of steady prices, or a few years of modest declines, he predicts. Hardly the stuff of looming national disasters.

Myth No. 2: Home-building stocks are pricey
The Philadelphia Housing Sector Index continued to hit new highs this month after more than doubling since the start of 2003. But ominously, revenue growth at home-builders is about to fall hard.

Toll Brothers (TOL, news, msgs), for example, expects net income growth to decline precipitously to about 20% in 2006 from an estimated 70% growth this year. Growth at other home-builders is slowing down as well.

But the bulls aren’t worried. Yes, home-building stocks have double or tripled in the past several years. But so have earnings. That means the stocks still don’t look any more expensive. “At eight times earnings, you bet your pocketbook,” says Ron Muhlenkamp of the Muhlenkamp fund (MUHLX), a value manager who originally loaded up on housing stocks back during the tech bubble and still isn’t selling.

Indeed, the top 13 public home-builders trade at a forward price-earnings ratio of 8, while their projected medium-term earnings growth rate is 15% (see table). This means their price-earnings to growth (PEG) ratio is 0.5, on average. As a general rule of thumb, growth stocks trading for PEGs of less than 1 to 1.5 are considered cheap. In other words, even if home-building revenue growth falls to 15% or 20%, as expected, the stocks still look reasonably priced.

Sifting through the home-builders
Company Name .....Ticker ...........Recent Price...... Buying Price.. Growth Rate* ...Insider buying
D R Horton ................DHI ..................$34.67 ................... $32.04 ...........15.4
Pulte Homes ...........PHM ..................$77.97 ..................$70.44 ........... 11.9
Centex...................... CTX ....................$66.94 ................. $67.62 ...........15.1
Toll Brothers............ TOL................... $97.20 .................. $68.14.......... 15.5
Lennar...................... LEN................. $59.33 ................... $55.13 ........... 15.6
KB Home................. KBH................. $67.68 ................... $56.72 ........... 17.1................. some
NVR.......................... NVR .................$799.00................. $578.10 ......... 12.5
MDC Holdings....... MDC.................. $76.74.................. $67.56........... 18.1
Ryland..................... RYL ..................$70.06 ................... $58.68........... 12.8
Hovnanian Enterprises HOV .........$61.40 ....................$51.06.......... 22.3
Standard Pacific SPF...................... $82.40................... $79.35 .......... 12.8
Beazer Homes .....BZH................... $53.38 ...................$52.10 .......... 15.2................ some
WCI Communities WCI.................. $30.03 ................... $26.46 .......... 13.8................ some

Small caps with insider buying
Comstock Homebuilding CHCI. $24.79 ...................... n/a.................. 40 ..................decent
Dominion Homes DHOM............ $15.82.................. $13.50.............. 10................ significant

*Five-year annual earnings growth
Source: Thomson Financial except buy limit which comes from John Buckingham, manager of the Al Frank fund (VALUX).

At least one home-builder -- D.R. Horton -- is so frustrated about not getting a higher multiple, despite a 10-year annualized earnings growth rate of 32%, it is deliberately slowing down growth. "We are not getting paid for it, so we decided to slow our growth and improve our balance sheet," says Tomnitz.

Myth No. 3: The cycle is bound to turn
Home-builders now trade near the top of their long-term valuation range. Historically, they trade for between five and nine times earnings. So home-building stocks have nowhere to go but down, say the bears. And they will, as the housing cycle inevitably plays out.

But there are several reasons to think the home-builders aren't as cyclical any more.

The top 13 public housing stocks in our chart do business in many regions. Unless we get a prolonged national recession, they’ll always be making decent profits in some growth market somewhere. “The pricing power that a builder has moves from one part of the country to another,” says Tomnitz. “I don’t think pricing power can go away across the country simultaneously.”

Next, even in hard times, the big home-builders will grow through consolidation, says Muhlenkamp. After all, the top 10 home-builders still control just 25% of the market.

Finally, several big-picture trends suggest supply will continue to be dwarfed by demand. On the supply side, there are land shortages in key metropolitan areas and greater obstacles to using land for housing. Meanwhile, demand will get a boost from new immigrants, baby boomers buying second homes and so-called echo boomers buying first homes.

Myth No. 4: Higher rates will pop the bubble
The amount that homebuyers have to shell out each month is driven by mortgage rates, which key off 10-year Treasury bond yields. And 10-year bond yields haven’t budged much even though the Fed has raised short-term rates to 3% from 1% since June 2004. Bears now believe that as inflation continues to rebound, rates on the 10-year bond will increase, driving up mortgage rates.

But if yields on the 10-year bond rise, they will go up because of economic strength – strength that creates more jobs. That will fuel more demand for housing, offsetting any negative impact from higher rates.

Next, interest rates are so low, it’s not clear they will go up enough to kill off the housing market. James Paulsen, the chief investment officer at Wells Capital Management. thinks yields on the 10-year bond will go up 1.5 to two percentage points to hit 5.5% to 6% over the next year or more.

That would take the 30-year mortgage rates -- recently around 5.5% -- up to about 7.5%. If history is any guide, that’s not enough to cool off the housing market. The last three housing market slowdowns -- in 1995, 1997 and 2000 -- didn’t happen until mortgage rates moved into the 8.4% to 9.4% range, says Joel Rassman, the finance chief at Toll Brothers. “There is so much demand, if we stay in the 6% to 7% plus range, housing will continue to boom,” says Rassman.

What and when to buy
Some folks, naturally, believe the myths, so housing stocks will remain volatile as the debate rages.

And some of the stocks have, indeed, gotten ahead of themselves. NVR Inc. (NVR, news, msgs) and Toll Brothers, for example, look expensive. NVR serves the hot Washington, D.C.-area market. Toll Brothers has good land holdings, and it serves wealthier homebuyers -- the kind that are less likely to think twice about buying as interest rates go up. But the market recognizes these advantages, which is why these two stocks are pricey.

In contrast, Centex, Standard-Pacific and Beazer already trade at or near attractive prices.

For the rest, it’s best to create a watch list selecting from our baker’s dozen of housing stocks and wait till they hit more desirable valuations. The top 13 home-builders on our list all serve markets in many regions -- which means they are diversified enough to enjoy steady growth somewhere even if the hot housing markets cool down.

I’ve also included two small regional players Dominion Homes (DHOM, news, msgs) and Comstock Homebuilding (CHCI, news, msgs) -- because each has fairly solid insider buying, a rarity in the home-building sector these days.

Stock recommendations
With this column, I'll be adding Centex and Beazer homes to the Company Focus portfolio in our stock recommendations section for tracking. We'll see how they do from here.