Picked up some Beazer
Update 6/17/09: I am out of BZH. Took a big %’age loss and hope to avoid looking back at this (I feel I could have gotten out at 2.15′ish with patience). I took $2.02 to cut my losses and run. Knowing that BZH is in violation of some of its debt covenants is not a good thing. The company is in desparate need of a debt refinance and the market has not been kind to companies in that position. Without new financing, the debtholders could force the companies hand and move them to Bankruptcy. Let’s not forget about what the shorts could do if they pile on and crush the common.
How quickly things change. I looked for a trade based upon the stock range and got caugh up in a debt downgrade that brough BZH to the fore. I wouldn’t be shocked to see a close of around $1.65-$1.72 on BZH (currently at $1.99).
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Call me crazy, but I like housing. If we are at, or near our bottom, housing will recover. I like BZH as a trade in this case. If I wanted to make a long term play in the sector, I would consider an ETF to minimize my risk. I couple of the housing/builders ETF’s are XHB and ITB (I own ITB in a long term account).
I am looking at BZH as a trade. When you watch stocks enough, you can get a sense of where the movement is. BZH has a pretty wide range which could make for good trading. I have been in and out between $2.44 and $2.76 in a long term account. With BZH earnings pretty far off, the stock should trade in a range with the market. My hope is to exit at around $2.57 for a nice little gain.
Consider the fact that housing starts were @ 2.2 million in December 2005. The are about 500k now. Are we at a bottom?
We’ll see how that one works out. If recent trading is an indicator for you, you should be shorting the stocks that I am buying. Patience will be the key on my open positions. I took a big loss on a trade a couple weeks back that would have been well into the money right now. Patience!!
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