Standard Pacific Corp. (SPF): Is This Home Building Stock Still a Buy?

Although, the home building and construction sector is currently somewhat overheated, experts are expecting further growth in sales in the coming months. The chairman of the S&P 500 index committee, Mr. David Blitzer, doesn’t consider the current market situation to be a “too much” rise in price; as he mentioned on CNBC a few weeks back.

Any potential?

There is some potential for growth with individual companies that are participating in the high growth potential niche of the overall housing market such as Standard Pacific, which is mainly focused on single family starts.

Based on the inclusive housing market parameters, and specifically, the upcoming projects of Standard Pacific that will cater to the rising demand in key metropolitan markets, its stock price has potential for further growth. Also, CRT Capital, a research firm, recently upgraded Standard Pacific’s stock from “Hold” to “Buy”, indicating further rise in the value of the stock.

Conclusion

Quantitative Easing measures, an expansionary monetary policy, and low interest rates set by the Federal Reserve have helped the rebounding of the housing market. Analysts consider majority of the sector to be overheated by now. However, by taking a closer look at the book values, savvy investors can easily sum up that there are few companies such as Standard Pacific that have some room to grow before being exposed to market corrections.

The article Is This Home Building Stock Still a Buy? originally appeared on Fool.com and is written by Mike Thiessen.

Mike Thiessen has no position in any stocks mentioned. The Motley Fool recommends Meritage Homes. Mike is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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