This housing market, this lamented group of stocks, just keeps getting boosted by two issues: what look to be permanently lower interest rates and these companies' lack of exposure to Europe.
Take the tale of two extremes: Toll Brothers (TOL) and Standard Pacific (SPF). Toll is high end, a national player, with a huge concentration in the East. Standard Pacific is much less expensive with a very big exposure to California.
A few years back, I recommended Standard Pacific, having seen with my own eyes the snapping up of its houses by bottom-fishers. I thought the stock would react. It didn't. But this year, with developing tightness out West and a lack of European exposure, it has been a total horse, surging 100%. A company that was written off for dead is now, again, a player.
Toll never was challenged like Standard Pacific. It has the best balance sheet in the industry, and there was always going to be a place for more expensive homes. But what mattered here was that there were areas where Toll simply couldn't close deals. You had cancellations galore, credit issues and saturated markets, particularly in Florida.
Now, not only are the model homes visited, there is money to buy, and lenders aren't looking the other way.
This is fabulous news. These two companies are harbingers of positives for 2013 -- these stocks always lead the economy up and down.
At a time when everyone seems to be giving up on everything, keep these two on your screen. They are nothing but net.