Traders Buy Large Volume of PulteGroup Put Options (NYSE:PHM)

Key Points

• Unusually heavy put buying hit PulteGroup, with traders purchasing 3,977 put options on Wednesday, about 156% above the stock’s average daily put volume.
• PHM shares fell about 5% to $123.44, while the company’s latest earnings showed EPS of $1.79, just below estimates, and revenue down 12.4% year over year.
• PulteGroup’s board authorized a $1.5 billion share buyback, and the company also paid a quarterly dividend of $0.26 per share, reflecting a 0.8% annualized yield.

PulteGroup, Inc. (NYSE:PHM - Get Free Report) saw unusually large options trading activity on Wednesday. Stock investors bought 3,977 put options on the stock. This is an increase of approximately 156% compared to the average daily volume of 1,555 put options.

Wall Street Analysts Forecast Growth

PHM has been the subject of several research reports. Seaport Research Partners reaffirmed a "sell" rating and set a $100.00 price objective (down from $155.00) on shares of PulteGroup in a research note on Tuesday, April 7th. Oppenheimer reiterated an "outperform" rating on shares of PulteGroup in a research report on Tuesday, May 26th. The Goldman Sachs Group boosted their price objective on PulteGroup from $133.00 to $142.00 and gave the stock a "neutral" rating in a research note on Friday, April 24th. Barclays dropped their target price on PulteGroup from $115.00 to $112.00 and set an "equal weight" rating for the company in a report on Wednesday, April 8th. Finally, Bank of America dropped their price objective on shares of PulteGroup from $145.00 to $140.00 and set a "buy" rating for the company in a report on Monday, April 20th. Ten equities research analysts have rated the stock with a Buy rating and seven have given a Hold rating to the company's stock. Based on data from MarketBeat, PulteGroup currently has a consensus rating of "Moderate Buy" and an average price target of $141.43.

PulteGroup Trading Down 5.0%

Shares of PHM stock traded down $6.47 during trading hours on Wednesday, hitting $123.44. The company had a trading volume of 559,658 shares, compared to its average volume of 1,858,305. The company has a debt-to-equity ratio of 0.14, a current ratio of 0.94 and a quick ratio of 0.94. The stock has a market capitalization of $23.52 billion, a PE ratio of 11.96, a price-to-earnings-growth ratio of 1.67 and a beta of 1.18. The company's fifty day moving average is $122.29 and its 200 day moving average is $124.71. PulteGroup has a fifty-two week low of $107.16 and a fifty-two week high of $144.49.

PulteGroup (NYSE:PHM - Get Free Report) last posted its earnings results on Thursday, April 23rd. The construction company reported $1.79 earnings per share (EPS) for the quarter, missing the consensus estimate of $1.80 by ($0.01). The firm had revenue of $3.41 billion for the quarter, compared to analyst estimates of $3.40 billion. PulteGroup had a return on equity of 16.41% and a net margin of 12.14%.PulteGroup's revenue was down 12.4% on a year-over-year basis. During the same period in the previous year, the company posted $2.57 EPS. Research analysts expect that PulteGroup will post 9.95 earnings per share for the current fiscal year.

PulteGroup announced that its board has authorized a share buyback program on Thursday, April 23rd that permits the company to buyback $1.50 billion in outstanding shares. This buyback authorization permits the construction company to purchase up to 6.1% of its stock through open market purchases. Stock buyback programs are usually a sign that the company's board believes its shares are undervalued.

PulteGroup Announces Dividend

The business also recently declared a quarterly dividend, which was paid on Thursday, July 2nd. Shareholders of record on Tuesday, June 16th were given a $0.26 dividend. The ex-dividend date of this dividend was Tuesday, June 16th. This represents a $1.04 dividend on an annualized basis and a yield of 0.8%. PulteGroup's dividend payout ratio (DPR) is currently 10.06%.

Insider Transactions at PulteGroup

In related news, COO Matthew William Koart sold 7,457 shares of PulteGroup stock in a transaction dated Wednesday, May 27th. The stock was sold at an average price of $120.00, for a total value of $894,840.00. Following the sale, the chief operating officer directly owned 28,100 shares in the company, valued at approximately $3,372,000. The trade was a 20.97% decrease in their position. The transaction was disclosed in a filing with the SEC, which is accessible through this hyperlink. Also, Director Lila Snyder sold 3,339 shares of PulteGroup stock in a transaction that occurred on Friday, May 8th. The stock was sold at an average price of $117.18, for a total value of $391,264.02. Following the completion of the sale, the director directly owned 3,540 shares in the company, valued at $414,817.20. This represents a 48.54% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Company insiders own 0.75% of the company's stock.

Institutional Investors Weigh In On PulteGroup

A number of large investors have recently modified their holdings of PHM. Norges Bank purchased a new stake in PulteGroup in the fourth quarter valued at $466,653,000. Price T Rowe Associates Inc. MD grew its holdings in shares of PulteGroup by 126.5% during the fourth quarter. Price T Rowe Associates Inc. MD now owns 4,284,197 shares of the construction company's stock worth $502,366,000 after purchasing an additional 2,392,580 shares during the last quarter. Public Sector Pension Investment Board grew its holdings in shares of PulteGroup by 5,485.0% during the fourth quarter. Public Sector Pension Investment Board now owns 930,622 shares of the construction company's stock worth $109,125,000 after purchasing an additional 913,959 shares during the last quarter. Franklin Resources Inc. increased its position in shares of PulteGroup by 5.1% during the fourth quarter. Franklin Resources Inc. now owns 13,555,304 shares of the construction company's stock worth $1,589,495,000 after purchasing an additional 655,033 shares in the last quarter. Finally, Milford Funds Ltd. purchased a new stake in shares of PulteGroup in the 4th quarter valued at about $68,379,000. 89.90% of the stock is owned by hedge funds and other institutional investors.

About PulteGroup

PulteGroup, Inc NYSE: PHM is a U.S.-based residential homebuilder that designs, constructs and sells single-family homes and develops master-planned communities. The company operates multiple national and regional brands that target different buyer segments, including first-time buyers, move-up buyers and active-adult customers. Its operations encompass land acquisition and development, home design and construction, community amenities and ongoing customer service and warranty programs.

PulteGroup markets homes under several well-known brands, such as Pulte Homes, Centex and Del Webb, among others, offering a range of product types from entry-level detached homes to larger, higher-end residences and age-restricted active-adult communities.

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