NEW YORK (TheStreet) --Shares of PulteGroup Inc. are higher by 2.67% to $22.30 in early afternoon trading on Thursday, as homebuilder stocks continue to rise following Wednesday's Bloomberg report suggesting that President Obama will announce plans to cut mortgage insurance premiums issued by the Federal Housing Administration, during a speech in Phoenix, AZ, today. The announcement is part of the Obama administration's plan to expand and promote homeownership, Bloomberg said. The plan will cut FHA insurance premiums on mortgages with low down payments and could save a borrower $1,000 per year on a $200,000 loan, the Wall Street Journal reports. The new housing policy is said to be going into effect at the end of January. Exclusive Report: Jim Cramer's Best Stocks For 2015 STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. The program is designed for borrowers who have little cash for down payments in mind, such as a first time home-buyer, the Journal said. The FHA doesn't issue loans but insures lenders in the event of a default on a mortgage with a down payment as small as 3.5%, borrowers have to pay for the insurance, the Journal said. President Obama will deliver his speech from Central High School in Phoenix, at 10:45am MST, 12.45pm EST., according to the White House website schedule. Separately, TheStreet Ratings team rates PULTEGROUP INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation: "We rate PULTEGROUP INC (PHM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income." Highlights from the analysis by TheStreet Ratings Team goes as follows: The revenue growth came in higher than the industry average of 10.1%. Since the same quarter one year prior, revenues slightly increased by 0.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share. The current debt-to-equity ratio, 0.40, is low and is below the industry average, implying that there has been successful management of debt levels. Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year. PULTEGROUP INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PULTEGROUP INC increased its bottom line by earning $6.74 versus $0.53 in the prior year. For the next year, the market is expecting a contraction of 84.0% in earnings ($1.08 versus $6.74). The gross profit margin for PULTEGROUP INC is rather low; currently it is at 23.73%. Regardless of PHM's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PHM's net profit margin of 8.81% compares favorably to the industry average. You can view the full analysis from the report here: PHM Ratings Report STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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