May 24 brought news that US new home sales rose at the fastest pace in more than 8 years during the month of April 2016. Computer Sciences leaps to our estimate of intrinsic value on buyout news, and Altera rival Xilinx rises on speculation of potential suitor.
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By The Valuentum Team
New Homes Sales Leap
“Sales of new single-family houses in April 2016 were at a seasonally adjusted annual rate of 619,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 16.6 percent (±15.4%) above the revised March rate of 531,000 and is 23.8 percent (±22.8%) above the April 2015 estimate of 500,000…
…The median sales price of new houses sold in April 2016 was $321,100; the average sales price was $379,800. The seasonally adjusted estimate of new houses for sale at the end of April was 243,000. This represents a supply of 4.7 months at the current sales rate.”
Homebuilders: CAA, DHI, JOE, KBH, LEN, MDC, MTH, NVR, PHM, TOL
Computer Sciences Surges
Computer Sciences (CSC) railed to near our estimate of its intrinsic value on news that it would tie the knot with HPE’s (HPE) Enterprise Services unit, which Hewlett Packard Enterprise plans to spin off by March 2017. CSC had been on our radar of “Stocks That Are Cheap on Both a DCF and Relative Value Basis,” as well as on “The Strongest Dividend Payers Yielding Over 2%.”
Xilinx Jumps
We heard May 24 that Xilinx (XLNX) may be in play. According to StreetInsider, no suitor has been named but the offer price appears to be in the neighborhood of $15 billion. We can’t confirm anything, but given Intel’s acquisition of rival Altera, Xilinx’s assets are certainly in high demand. Developments remain ongoing.