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Associated Press
Hovnanian Rises Amid Talk of Buffett Bid
By CHRIS NEWMARKER 07.13.07, 6:03 PM ET
TRENTON, N.J. -
Shares of homebuilder Hovnanian Enterprises Inc. shot up Friday amid press
reports that Warren Buffett's Berkshire Hathaway Inc. might be eyeing the
company.
Shares of Red Bank, N.J.-based Hovnanian rose $1.98, or nearly 12 percent, to
$18.53 Friday. The stock was up slightly in after-hours trading, shortly
after 5 p.m.
Buffett's assistant Debbie Bosanek declined to comment on the situation,
citing a company policy not to discuss company activities unless legally
required to do so. A Hovnanian spokesman didn't immediately have a
comment on the stock's rise in value.
Hovnanian, like other companies in the industry, has suffered a downturn in
the housing market, leading to a situation in which stock prices could be
undervalued. Hovnanian shares were trading around $70 per share in mid-2005.
But some who follow Buffett's activities warned that the rumors of a
Hovnanian takeover may be just that: rumors.
"I've covered him for 20 years, and I've seen these rumors, thousands of
them, and very rarely are they true," said Andy Kilpatrick, a
Birmingham, Ala., stockbroker and author of "Of Permanent Value, the
Story of Warren Buffett."
With Omaha, Neb.-based Berkshire Hathaway controlling Home Services of
America, one of the largest real estate brokerage firms in the
country, Buffett might not be interested in getting into the business
of building homes, according to Justin Fuller, an analyst who follows
Berkshire Hathaway at Chicago-based Morningstar Inc.
"In the past, he's said he'd rather take a piece of the transactions, because
he wouldn't want direct exposure to transactions in the real estate market,"
Fuller said.
The housing industry has been suffering this year amid problems in the
subprime mortgage market. Markets that were once red-hot have seen
declining sales and falling prices.
Hovnanian lost $30.7 million, or 49 cents per share, for the three months
ended April 30, after paying preferred stock dividends. That compared with a
profit of $101 million, or $1.55 per share, in the same period a year ago.
The company builds homes in 17 states including California, Florida, New
Jersey and New York.
Copyright 2007 Associated Press.
Hovnanian Rises Amid Talk of Buffett Bid
By CHRIS NEWMARKER 07.13.07, 6:03 PM ET
TRENTON, N.J. -
Shares of homebuilder Hovnanian Enterprises Inc. shot up Friday amid press
reports that Warren Buffett's Berkshire Hathaway Inc. might be eyeing the
company.
Shares of Red Bank, N.J.-based Hovnanian rose $1.98, or nearly 12 percent, to
$18.53 Friday. The stock was up slightly in after-hours trading, shortly
after 5 p.m.
Buffett's assistant Debbie Bosanek declined to comment on the situation,
citing a company policy not to discuss company activities unless legally
required to do so. A Hovnanian spokesman didn't immediately have a
comment on the stock's rise in value.
Hovnanian, like other companies in the industry, has suffered a downturn in
the housing market, leading to a situation in which stock prices could be
undervalued. Hovnanian shares were trading around $70 per share in mid-2005.
But some who follow Buffett's activities warned that the rumors of a
Hovnanian takeover may be just that: rumors.
"I've covered him for 20 years, and I've seen these rumors, thousands of
them, and very rarely are they true," said Andy Kilpatrick, a
Birmingham, Ala., stockbroker and author of "Of Permanent Value, the
Story of Warren Buffett."
With Omaha, Neb.-based Berkshire Hathaway controlling Home Services of
America, one of the largest real estate brokerage firms in the
country, Buffett might not be interested in getting into the business
of building homes, according to Justin Fuller, an analyst who follows
Berkshire Hathaway at Chicago-based Morningstar Inc.
"In the past, he's said he'd rather take a piece of the transactions, because
he wouldn't want direct exposure to transactions in the real estate market,"
Fuller said.
The housing industry has been suffering this year amid problems in the
subprime mortgage market. Markets that were once red-hot have seen
declining sales and falling prices.
Hovnanian lost $30.7 million, or 49 cents per share, for the three months
ended April 30, after paying preferred stock dividends. That compared with a
profit of $101 million, or $1.55 per share, in the same period a year ago.
The company builds homes in 17 states including California, Florida, New
Jersey and New York.
Copyright 2007 Associated Press.