Hovnanian Soars Almost 12% Amid 'Slow Friday in July' Rumor Buffett is Buying
Shares of the beleaguered home builder Hovnanian are up sharply today amid rumors that Warren Buffett's Berkshire Hathaway is buying a stake in the company. Optionmonster.com founder and frequent Fast Money player Jon Najarian is quoted as saying, "There is talk that Warren Buffett is buying a stake in Hovnanian. We think such a move by Buffett would clearly signal a bottom is finally in or near this battered housing sector." Reuters contacted Buffett's assistant who declined to comment.
Bloomberg cites a Stifel Nicolaus trader as saying, "There's talk that Warren Buffett wanted to buy a stake. People are extrapolating that (he) could be trying to call the bottom of the homebuilder stocks." But Greg Palmer, head of equity trading at Pacific Crest Securities tells Bloomberg, "It's just another junk rumor on a Friday. If you put a big name to it then away you go." Our own Bob Pisani on the floor of the NYSE points out that it is a slow Friday in July, the exact time "you would expect a rumor like this to surface."
TheStreet.com's report is also skeptical: "Two sources who closely follow the homebuilding industry said they would be surprised if the rumor turned out to be true."
And this afternoon, Mad Money's Jim Cramer commented on the Buffett rumors, saying if Warren wanted to buy a homebuilder he would probably go for the larger Pulte Homes instead of Hovnanian.
Whether you believe the speculation has any basis in fact or not, other homebuilders are going along for the ride: