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There’s still some time until the homebuilders release their earnings. What are the trades you should be making into the big reports? In a live interview on Fast Money Stifel Nicolaus analyst Michael Widner made a few suggestions.“For the long-term, a 3-year view, we like Pulte but in the short term we think its vulnerable," he says.
Widner's bearish outlook largely has to do with a widely followed metric that he expects will be weak. "We think they’re setting up for a disappointing orders comps and that’s something the Street watches closely,” says Widner. By contrast Widner is constructive on MDC .“This is a company with a strong balance sheet – more cash than debt – but the stock has languished (because) their management team has made questionable strategic decisions over the past few years. I think there are low expectations for this stock.”Meanwhile Jon Najarian also has some thoughts on the homebuilders as well.“I would shortLennar which has outperformed and pair it with a long position in DR Horton which has underperformed and play it for a reversion to the mean.”
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