dhi

D.R. Horton (NYSE: DHI) saw its earnings-per-share plunge from a profit of $3.90 in 2006 to a staggering loss of $8.34 last year. Fortunately, the worst is behind us. This year D.R. Horton will probably lose about $1 per share.

I don't like to see any loss, but this is a huge improvement. In fact, I think there's even a good chance D.R. Horton could start posting some earnings gains by next year.

D.R. Horton is also a buy.

Next: Home builder stock #3

The past few years haven't been what you might call a happy time for shares of home building stocks. Consider that the Homebuilders Exchange-Traded Fund (NYSE: XHB) plunged from $40 per share in early 2007 to just $8 per share earlier this year.

Since March, however, things have improved. There are signs that the housing market is getting back on its feet -- or at least, declining less slowly. Existing home sales recently registered their biggest gain in more than a decade. Seasonally-adjusted single-family building permits are up 27% since bottoming in March, while single-family housing starts have increased five straight months and are up 36% since March.

If you listen to the majority of economists out there, they will tell you that the collapse of the housing market was one of the major factors that pushed us into the current recession. They will also tell you that a recovery in the housing market will be necessary if we are to ever pull out of this recession.

So it's no surprise that, with all of that in mind, economists and investors have been excited to see improvements in the housing market this summer.

For instance, the New Home Sales number released on Wednesday by the Census Bureau showed that sales rose more than expected in July -- to 433,000.

Most investors got slammed last year, down 50% or more in their investments. Didn't matter if they owned stocks or real estate, they got hammered. Many have to start over. And if they're near retirement, it's scary. Years of patient investing wiped out, gains that were made over a long time disappeared frighteningly fast.

But now it's time to begin fresh, to rebuild. What's the safest way to regain some or all of the losses without suffering another wipeout?

Lennar (NYSE: LEN), whose colleagues include Toll Brothers (NYSE: TOL) and D.R. Horton (NYSE: DHI), reported earnings for the second quarter on Thursday. Since it is a homebuilder, you can expect that it would be a tough one to look at in many respects. There was a revenue decline of over 20%. And there was no profit. Lennar said it lost 76 cents per diluted share.

According to Michael Fowlkes and his earnings preview, Lennar did not satisfy Wall Street's outlook. Analysts were expecting a loss somewhere closer to 63 cents per share. That didn't stop the stock from going up, though. Lennar closed higher yesterday by over 17%. Volume was likewise incredible. Apparently, the market was focusing on the revenue beat.

Hovnanian Enterprises (NYSE: HOV), a home builder whose related companies include Toll Brothers (NYSE: TOL), Lennar Corp. (NYSE: LEN), and D.R. Horton (NYSE: DHI), reported Q2 results on Tuesday after the bell. The company reported a loss of $1.50 per share (the results included a gain related to debt extinguishment). That unfortunately did not meet analyst expectations according to Trey Thoelcke's earnings preview. Analysts were looking for a loss of $1.26 per share.

However, things do look better. Last year at this time, the loss recorded by Hovnanian was a whopping $5.29 per share. Revenues, however, plummeted to $398 million from over $770 million. Analysts were expecting only $348 million according to the preview.

TheStreet.com's Jim Cramer says this group simply refuses to merge, so you can safely sell them all.

One look at Toll Brothers' (NYSE: TOL) (Cramer's Take) quarter today tells us we aren't there yet. They still have plenty of money. They still have plenty of cancellations. They still need a tax credit for more business, which we know they aren't going to get because this administration doesn't want it. No bottom. In fact, Toll and all the others are still where they were a year ago. Independent, hanging on.

The troubled housing market got a bit of good news today, as the National Association of Realtors stated that pending home sales rose during the month of December.

According to today's report, pending home sales increased by 6.3% in December, coming off an all-time low that it set in November. The news comes as potential home buyers are starting to show interest in deeply-discounted homes.

Given last week's news that new home sales have plunged and that new home prices continue to fall, what is Wall Street expecting from homebuilders Centex Corp. (NYSE: CTX), Pulte Homes Inc. (NYSE: PHM), and DR Horton Inc. (NYSE: DHI) when they report quarterly results this week?

Analysts surveyed by Thomson Reuters anticipate that Dallas-based Centex will report that it narrowed its net loss in its fiscal third quarter to $3.27 per share. In the same period of last year, the loss was $7.94 per share. Revenue in the third quarter is expected to total $895.3 million, down 53.0% from last year. For the full year, the loss is expected to reach $7.36 per share on revenue of $4.0 billion, which compares to a $21.69 per share loss on $8.3 billion in sales in 2008. Centex has posted bigger-than-expected losses in the past five quarters. So the consensus recommendation of analysts remains to hold CTX, though the long-range EPS growth forecast is 9.0%. The share price has fallen 20.0% just since the beginning of the year, and it is 70.7% lower than it was a year ago. Centex suspended its quarterly dividends back in October.

General Motors Corp. (NYSE: GM) and Ford Motor Co. (NYSE: F) may get help from the Bush administration. President Bush said in an interview today that "an abrupt bankruptcy for the autos could be devastating for the economy." He signaled he may use TARP funds for that, but didn't provide a timeline or other details. GM shares are up 4.8% in premarket, Ford's shares are up 2%. Shares of both opened about 3% higher.

Goldman Sachs Group Inc. (NYSE: GS) and Morgan Stanley (NYSE: MS) probably will report fourth-quarter losses this week on shrinking asset values and a decline in fees for businesses. But even the deep cost cutting measures the investment firms -- now turned banks -- may not help help shareholders enough as the companies face another year of slumping revenue. The demand for their services is and will continue to be limited in what is the worst financial crisis since the Great Depression. GS shares are down 2% in premarket trade.

Banco Santander (NYSE: STD), Nomura (NYSE: NMR) and Royal Bank of Scotland (NYSE: RBS) are among the victims ex-Nasdaq Chairman Bernard Madoff' $50 billion Ponzi scheme. Santander said its customers had an exposure of around $3.1 billion, while Japan's Nomura has an exposure of around $302 million. STD shares are down 1.5% and RBS shares up 1.7% in premarket trade.

[Update 10:00 am:
Huntsman Corp. (NYSE: HUN) shares were down about 35% a little after the open after it has ended its $6.5 billion agreement to be taken over by Hexion Specialty Chemicals Inc. and agreed to a $1 billion legal settlement.
Apple Inc. (NASDAQ: AAPL) shares were down about 4% a little after the open on a downgrade. Goldman Sachs downgraded the iPhone and Mac maker to Neutral from Buy due to deteriorating consumer spending.
JPMorgan (NYSE: JPM) shares slumped nearly 6% after a Merrill Lynch analyst downgraded JPM to Underperform from Neutral.
Honeywell (NYSE: HON) shares gained nearly 7.5% after the manufacturer affirmed a lower 2009 outlook and said it expects profits to fall 6% to 16% as the deepening global recession hits markets it serves.]

General Motors Corp. (NYSE: GM) -- as it runs short of cash and attempts to raise $4 billion from asset sales, GM has asked real estate agent Jones Lang LaSalle for help in raising up to $257 million from the sale and leaseback of some of its European offices and other property assets, as well as inquired about its options regarding the Renaissance Center, the Detroit skyscraper complex that serves as its headquarters, the Financial Times reported.

Meanwhile, adding insult to injury, GM has asked the U.S. Federal Aviation Administration to prevent public tracking of a jet it leases.

Ford Motor Co. (NYSE: F) is also ignoring public outcry and is so far resisting pressure to cut the salary of its chief executive. Maybe asking emergency help from the federal government requires that large compensation...

Staying with automarkers, Deutsche Bank analyst Rod Lache said the scales are tipping in favor of a federal bailout from GM and Ford, MarketWatch said. GM traded 12% higher and Ford shares were 15% higher in the first minutes of trade.

Bank of America (NYSE: BAC) -- The Federal Reserve Board officially approved BAC.'s acquisition of Merril Lynch (NYSE: MER) on Wednesday in a $50 billion deal first announced in September. BAC shares were nearly 3% higher and MER's over 4% higher in the first few minutes of trade.

TheStreet.com's Jim Cramer says you just can't be as negative as you were before the latest actions.

It's been right to be more than the average bear for months now. But if you believe that housing played some role in the downturn, then you have to believe that the latest moves are very meaningful for that trashed market.

We have had two major problems in housing: affordability and the ease and cost of mortgage money. We got news this week that ameliorated both difficulties, and we cannot sniff at them as much as it has paid to sniff at everything else that has been done.

First, the government's buy of GSE paper revives a moribund market and ends a lot of federal indecision. If you recall when the government confiscated the Fannie (NYSE: FNM) (Cramer's Take) and Freddie (NYSE: FRE) (Cramer's Take) preferreds and therefore made FNM paper more dangerous, the government at the same time said that it would make mortgage rates come down, presumably by buying a ton of Fannie/Freddie paper. Instead it made a half-hearted effort by buying about $25 billion in paper and then disappeared!

Ford, Volvo Top List osf Safest U.S. Vehicles
The most new cars and trucks ever earned spots on the insurance industry's annual list of the safest vehicles. For the 2009 model year, Ford and Volvo have 16 vehicles on the Insurance Institute for Highway Safety's list of the safest cars, followed by Honda Motor with 13 vehicles. Seventy-two cars, trucks and SUVs received the top safety pick designation for the 2009 model year, more than double the number of vehicles in 2008.
http://www.usatoday.com/money/autos/2008-11-24-ford-volvo-car-safety_N.htm

GM: Death of the American Dream
General Motors was the Great American Company. But by clinging to the attributes that made it an icon, GM drove itself to ruin.
http://money.cnn.com/2008/11/21/magazines/fortune/taylor_generalmotors.fortune/index.htm?postversion=2008112506

BHP Billiton (NYSE: BHP) dropped its $66 billion Rio Tinto (NYSE: RTP) takeover bid after a year-long pursuit, citing the deteriorating economy, the rout in commodities prices and the credit-market squeeze for derailing the biggest hostile takeover. Rio Tinto shares dropped 34.6%, while BHP rose over 13.7% in premarket trading (8:04 am). At around 11:00 am, BHP stock gained about 18%, while RTP's declined over 32%.

Hewlett-Packard Co. (NYSE: HPQ) posted impressive, better-than-expected results Monday afternoon thanks to its diversified business. These included 21% growth in laptop sales, and a totoal revenue growth of 19%. Still, Wall Street doesn't have confidence in how the computer company will do as the economy worsens, and some think it will do worse than management believes. HPQ shares declined 1.3% in premarket trading (8:03 am). HPQ shares declined 6.2% as of 11 am.

Starbucks (NASDAQ: SBUX) warned yet again late Monday of an "extremely challenging" fiscal year as it forecast slumping sales. It seems that selling high-end coffee during a recession is a tricky business. For fiscal 2009, which began Sept. 29, Starbucks said it expects to see a drop in sales at coffee shops that it opened at least a year ago, extending a trend already evident in 2008. While warning of another round of restructuring, SBUX also said October store traffic has actually improved. SBUX shares declined over 5% in after-hours trading Monday. SBUX shares declined about 1% as of 11 am.

TheStreet.com's Jim Cramer says tons of stocks look like good buys, and they go down all the time.

All weekend I heard it. Stocks have gotten too cheap. Put 'em away cheap. Don't worry about 'em cheap. To which I say, stocks are only cheap if the companies make it. Stocks are only cheap if the bondholders don't claim them.

Every day I see cheap stocks. Ford (NYSE: F) (Cramer's Take) reported this morning. Ridiculously cheap. How cheap is Sprint (NYSE: S) (Cramer's Take), for heaven's sake? Did you see the Sunrise Senior Living (NYSE: SRZ) (Cramer's Take) numbers? That stock should show up when you enter "cheap stock" in Google. Except Las Vegas Sands (NYSE: LVS) (Cramer's Take) comes up.

When Warren Buffett says stocks are cheap, or Jeremy Grantham or Steve Leuthold or Jeremy Siegel, it's very heartening. You just want to go out there and buy cheap stocks like CBS (NYSE: CBS) (Cramer's Take) and Williams-Sonoma (NYSE: WSM) (Cramer's Take) and Ann Taylor (NYSE: ANN) (Cramer's Take) and Talbots (NYSE: TLB) (Cramer's Take).