Jim Cramer Breaks Down KB Home's Results and Strategy

KB Home (NYSE:KBH) is one of the stocks on Jim Cramer’s radar recently. Cramer discussed the company’s recent earnings and conference call. He commented:

“Next up, KB Home reported last night, and even though it was, another really good home builder by the way, even though it’s more encouraging than Lennar, it wasn’t that much better… Still, management did something I thought was very useful in the conference call. They broke out in detail what lower mortgage rates mean for their business and for the customer. Mortgage rates have fallen roughly 60 basis points from earlier this year, and the company says that adds $30,000 of purchasing power based on their average selling price. Now, that’s a good chunk of change, especially for the first-time home buyers or those looking to upgrade for the first time, groups that make up 70% of KB Home’s customers. This is, in other words, a group of more moderately income people. The company seems to be taking a different approach than Lennar, which got very promotional last quarter in order to sell more units. KB Home maintains they don’t need to chase incremental volume right now.”

KB Home (NYSE:KBH) builds and sells single-family homes, townhomes, and condominiums for buyers, including first-time and move-up purchasers. Additionally, it provides mortgage banking, insurance, and title services to support homebuyers.

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Disclosure: None. This article is originally published at Insider Monkey.