Top Performers: On July 26th, I covered Hovnanian Enterprises [NYSE: HOV], and its bullish price action at the time. In the article titled, Hovnanian Enterprises (HOV) Bullish Reversal might help its future on the NYSE, I focused on its bullish engulfing candlestick, and how it could mark an end to the bear run. At that time, I also touched on a strengthening job market, and low-interest rates as factors that could support home-builders such as HOV.
Hovnanian has not disappointed and it continues to show signs of strength. In the chart above, you can see the move HOV has made since I covered it back on July 26, 2019 when it opened up for trading around $6.88. Since then, it has hit a high of $16 yesterday making an incredible 132% gain potential. The stock was a big gainer yesterday, and closed the day with gains of roughly 20.57%, following a positive Q3 earnings report.
The company reported that quarterly earnings grew for the first time since 2016. Revenues grew by about 6% and were mainly pushed by an increase in deliverables, which rose by 4% in the quarter. Average sales increased by 2% in the quarter as well. The gross margins also increased by around 16.9%, when compared to Q2. The company attributed this to an aggressive use of incentives, especially on spec homes. On top of that, the company also announced that it expects its gross margins for Q4 to remain the same as those of Q3. On the basis of these numbers, the company expects its pre-tax loss for the 9-months of 2019 to be much lower than the last financial year. It also expects its committee count to help drive up home deliveries, and total revenues, for the 2020 fiscal year.
These positive numbers for the last quarter and projections for the future will likely play a role in HOV’s price action in the day. It could be a continuation of yesterday’s momentum when 1.07 million shares of this company’s stock were traded. The price action was quite volatile, and HOV traded between $13 and $16, before closing at $15.30. At the moment, this home builder has a market cap of $59.004 million.