KB HOME (KBH)

We’ve owned KBH a few times over the years.  Our current investment in KBH is up 14.92% since our purchase in the spring, but forward forecasting at least for the next 12-18 months does not look promising. In addition, problems with KBH’s mortgage lender, and some bad choices as to streamlining costs are not putting the company in a competitive frame relative to other volume builders.  Its debt remains too high, and is not trending well. The divided was also recently cut.  So we’ll take the gain and the small dividend (1%) and call it a day. If KBH can put itself back on track, and the price is right, we’d revisit them as a buy, as much of their model still works.  SELL.