As if pouring salt on a wound, Moody's came out today and cut the rating of luxury home builder Toll Brothers (NYSE: TOL) to junk status. Their rating was cut to Ba1 from Baa3.
As reported in a Bloomberg report, Moody's said: " While the company is one of the only remaining home builders that is currently generating earnings before impairment charges, Moody's does not expect this to continue, as falling prices and lower absorption rates continue to impact margins."
Toll Brothers CEO Robert Toll has recently told the market that he thinks that real estate is still in a downward spiral. It seems that Moody's agrees. While this all maybe true, for long term investors, shares in Toll Brothers are certainly intriguing under $19. Long term, contrarian inclined investors may want to do a bit of research as the shares maybe approaching levels that are hard to refuse.
Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/3/08.
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