I purchased this one about the same time as WB. KBH is my speculative pick. The homebuilding sector has been taken down for over a year and probably has even further to fall. I'm guessing this will be at least a year long buying opportunity. I choose KBH over other homebuilders (Toll Brothers was #2, not bought) because it appears upper management is positioning themselves to take a short term hit to better position themselves when the market returns. Such as, getting out of some areas and moving inventory.
There is one issue, I am now overexposed to the Federal Reserve with both KBH and WB. KBH just announced they are reinstating their dividend while rumors run amok that WB is going to cut theirs. On the other side, WB is actually making money, while KB sits in the red. I need to dump one of these, I'm just not sure which.
I'll bail when: not sure?
I'll cash out when: 25%, I'm willing to bet I'll be able to get back in.
I'll buy more when: 5$ - $10 down
--Brad
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