Thursday, August 02, 2007

UPDATE: Griffin's Citadel LP Boosts Stake in Embattled Homebuilder Beazer Homes (BZH) to 5.7%

Did yesterday's plunge in Beazer on rumors of a bankruptcy mark a bottom in homebuilders? BZH his an intra-day low of $8.10 yesterday on the talk. The stock is currently at $12.79.

This just in from the 13G section of our main site:

In a 13G filing on Beazer Homes USA, Inc. (NYSE: BZH), Ken Griffin's Citadel LP disclosed a 5.7% stake (2,229,600 shares) in the homebuilder. This is up from the 1,191,247 share stake the firm held at the quarter ended March 31, 2007.

Yesterday, shares of Beazer plunged more than 40% on rumors the company was headed for bankruptcy. Shares recovered to close down 18% after refuting the rumor.

According to, Citadel Investment Group is a $20 billion dollar Chicago-based hedge fund founded by billionaire trader Kenneth C. Griffin, and is one of the world's largest hedge funds. The firm is known for its daily trading volume, which amounts to 1-2% of daily trading activity in New York and Tokyo. Link to Citadel Portfolio

I would like to see a big homebuilder go under before I feel comfortably calling a bottom. There was just too much wild excess for a builder not to be completely wiped out.

Citadel's call looks more company specific. They were clearly underwater in the position.

What is notable from the filing is that July 24th was the date which required the filing of the 5%+ position. While Citadel could have been buying yesterday, that buying was not reflected in the 13G out today.

What do you think? Are we near a bottom in homebuilders? Are you buying or looking to buy in the sector? Which ones do you think will make it. Which ones do you think could fail?

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Anonymous Anonymous said...

I would like to start bottom fishing. I like PHM and LEN

10:58 AM  
Anonymous Anonymous said...

Why would Citadel add to a losing equity position? Why not let BZH slide into bankruptcy and pick it up for pennies?

3:22 PM  
Anonymous Anonymous said...






1:34 AM  

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