While the rest of the market is starting to rise on Tuesday, investors in Toll Brothers (TOL) may only wish that that is what their stock did.
Toll Brothers shares fell 6% before noon after the company lost both earnings per share and revenue estimates. While the order growth was "fabulous", there are some concerns about the company's gross margins, TheStreet Jim Cramer said in CNBC "Mad Dash" segment.
Toll Brothers stock is still approximately 50% in the year, so let's not forget that this is still a big winner, he said. However, this is an example of the investors who sound the record in an action that was working and that put that money to work elsewhere.
There could be pressure on the Toll Brothers shares as investors seek to block profits. Also, beware of a possible downgrade that could also hurt the stock in the following days, said Cramer, who also manages the Action Alerts PLUS charitable trusts portfolio.
Mortgage rates are a double-edged sword when it comes to debating housing shares. On the one hand, as the rates of the EE. UU Increase, mortgages become more expensive and, therefore, could mitigate demand. On the other hand, the increase in rates is a sign of an improvement in the economy, which should bode well for housing demand.
But an argument that damages the house? The new tax plan
Certain states, such as California, New Jersey and New York, may see a decline in the value of the properties as a result of the new bill, Cramer said. For Toll Brothers, this is bad news because it has a lot of exposure in these states.
"It's an untold story that it's better to start counting," Cramer said, adding that he hates to say that property values are going down, because for many people, his house is his main investment.
The inability to deduct state and local taxes could also damage the demand for housing in these places, since states with little or no state tax suddenly become even more attractive, he concluded.
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