Homebuilder stocks are being watched, and the first one to stumble is Toll Brothers. They filed an 8-K on 8 November 2005, regarding their press release with preliminary information of projected revenues for 2006. To sum up: not good.
On 11/07/05 Toll Brothers (NYSE: TOL) closed at 39.41 on 2,812,800 shares traded.
On 11/08/05, after the announcement, closed at 33.91 on 16,612,300 shares traded.
Down 14%. And don't forget that trading volume!
But they didn't go down alone - they took their buddies with them:
WIlliam Lyons Homes (NYSE: WLS), down 10.7%.
Stanford Pacific Corp (NYSE: SPF), down 8.06%.
KB Homes Inc (NYSE: KBH), down 5.56%.
It's getting close to the end of the year, and the boys will have to start going on the record with projections for next year. It'll be fun. And don't forget all the mortgage lenders out there - are your ears burning, Washington Mutual (NYSE: WM) and Countrywide (NYSE: CFC)?
As for Toll Brothers, their press release started off with the fluff of how they've had 13 consecutive years of record profits. That should contrast nicely when the bottom falls out in 2006.
Robert Toll, CEO and chairman, did go on to say "we observed buyers taking longer to make their purchasing decison."
That would be one way to put it.
In other news, AP is reporting that former CEO of Refco, Phillip Bennett, has been indicted of conspiring to commit securities fraud.