It’s Time to Ring the Register on Hovnanian Stock

It’s Time to Ring the Register on Hovnanian Stock

Residential home builder Hovnanian (NYSE: HOV) stock has risen to nosebleed levels rising from $5 in July 2019 to hit highs of $146.30 in June 2021. While home builders have been incredibly strong with the housing market and shortage of new homes, investors should also take into account where stock prices are coming from. When comparing a stock that triples from $40 to $120 (up 3X) with a stock rising 29X from $5 to $145 (29X) in two years, the latter is more susceptible to a deeper reversion. Of course, the question of whether fundamentals justify the valuation is another issue as well as the industry environment and catalysts. Supply chain disruption and labor constraints impacted its Q4 2021 earnings release and will continue to be an issue in 2022. Three Federal Reserve rate hikes expected in 2021 could impact the real estate market significantly towards the…

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