This post was just published on ZYX Buy Change Alert.

Yesterday we told you about negative comments from two other home builders, PHM and DHI.  At this time, it is not clear if these two are company specific situations or this reflects a general industry trend.

Another home builder, SPF, reported earnings today.  We have just finished attending their conference call.  SPF commentary was positive.

There is a difference between SPF and PHM.  PHM and DHI mainly cater to low-end home buyers.  SPF caters to move up buyers.

The three important metrics here are:

  • traffic
  • cancellations
  • sales

The situation is very fluid and it is not clear if the dip in these stocks is still a buying opportunity or there is more downside.

What To Do Now?

To deal with this uncertainty, there is no change in our stance stated yesterday.