KB Home (KBH), Housing Competition Heats Up Out West

Ghosts of Crisis’ Past

As good news continues to unfold in housing, the capital markets are still being haunted by the sub-prime crisis of yesterday. The U.S. government is suing ratings agency Standard & Poor’s, which is owned by The McGraw-Hill Companies, Inc. (NYSE:MHP), for falsely representing the credit worthiness of the debt securities dating back to 2007 that imploded.  The lawsuit – one that S&P calls “unjustified” and without legal merit” in a press release — could fetch as much as $5 billion in damages, according to “The Wall Street Journal.” Shareholders are taking the brunt of this fight so far with McGraw Hill shares dropping more than 10 percent on Tuesday, the day the lawsuit was filed, which was the stock’s worst performance in a quarter-century, as pointed out by the WSJ.

The landscape in the housing market has shifted over the past five years and companies like KB Home are adapting to the new environment. Its decision to expand into financing is innovative, which helps to make this sector interesting once again despite the battles that are still being fought in and around these stocks.

The article Housing Competition Heats Up Out West originally appeared on Fool.com and is written by Gerelyn Terzo.

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