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Pros Trade Homebuilders into Earnings

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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Trader disclosure: On Apr 13, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Jon Najarian is long call spreads in INTC; Jon Najarian is long call spreads in IBM; Jon Najarian is long call spreads in HFC; Jon Najarian is long call spreads in MRO; Jon Najarian is long call spreads in SBUX; Jon Najarian is long call spreads in BRCM; Jon Najarian is long put spreads in GOOG; Jon Najarian is long CIGX; Jon Najarian is long CME; Jon Najarian is long CBOE; Pete Najarian is long AAPL; Pete Najarian is long AAPL CALLS; Pete Najarian is long C; Pete Najarian is long JPM CALLS; Pete Najarian is long MS; Pete Najarian is long INTC; Pete Najarian is long YHOO; Pete Najarian is long SBUX CALLS; Pete Najarian is long COP; Pete Najarian is long PEP; Steven Grasso is long ASTM; Steven Grasso is long AVAV; Steven Grasso is long BA; Steven Grasso is long D; Steven Grasso is long FRO; Steven Grasso is long MHY; Steven Grasso is long NUAN; Steven Grasso is long MO; Steven Grasso is long PFE; Steven Grasso is long PRST; Steven Grasso is long S; Steven Grasso is long XLU; Steven Grasso is long ZAZA

For Gerard Cassidy
Nothing to disclose

For Ben Schachter
Nothing to disclose

For Nicholas Consonery
Nothing to disclose

For Camilla Sutton
Nothing to disclose

For Brian Kelly
Brian Kelly is long CAF

CNBC.com with wires.

Symbol
Price
 
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DHI
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LEN
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MDC
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PHM
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