Homebuilders climb after Lennar results, NAHB data

17/09/2014 - 15:45

NEW YORK (Reuters) - Housing stocks were solidly outperforming the broader market in the early stages of trading on Wednesday, in the wake of earnings from homebuilder Lennar Corp and upbeat data on the housing market.

Lennar shares were trading 6.2 percent higher to $41.56, making it the best performer on the S&P 500 and putting it on track for its biggest one-day gain since December 2013.

Lennar, the second largest U.S. homebuilder, reported a better-than-expected 47 percent jump in quarterly profit as it sold more homes at higher prices. The company also said orders, a key indicator of future revenue for homebuilders, jumped 23 percent.

Lennar shares still appear to be undervalued, according to Thomson Reuters StarMine data, which holds a $47.72 intrinsic value on the stock, 12.9 percent below its most recent price.

The sector added to gains after the NAHB/Wells Fargo Housing Market index rose to 59 in September, the strongest reading for homebuilder sentiment in nearly nine years. The PHLX housing sector was trading 2.2 percent higher and the S&P homebuilding index was climbing 4.4 percent.

Index snapshot at 10:31 EDT (1431 GMT):

* S&P 500 was rising 3.54 points, or 0.18 percent.

* Nasdaq Comp was gaining 8.59 points, or 0.19 percent.

* Dow industrials was adding 28.93 points, or 0.17 percent.

* Russell 2000 was adding 6.75 points, or 0.59 percent.

* S&P MidCap was adding 3.85 points, or 0.27 percent.

* S&P SmallCap was gaining 3.23 points, or 0.49 percent.

(Reporting by Chuck Mikolajczak; Editing by Nick Zieminski)