Ryland's Future Growth Ability Is Enticing

We all know the story on the residential construction sector. It has been one of the toughest industries in recent economic times. A lack of new home demand, which is brought on by the high levels of unemployment and economic uncertainty, has plagued the entire sector. Recent rises in home sales in late 2009 and early 2010 were mostly fueled by tax credits. Now that those have disappeared natural demand has reappeared and sales have dropped off again for homebuilders. Real demand for homes may not appear again until 2013 – 2014, and until then, these companies will continue to struggle. Those companies that can do the best job of keeping down debt, remaining financially healthy, and liquidating inventory, will be able to remain above water and play the waiting game for demand to return. One company that has maintained one of the cleanest balance sheets is Ryland Group Inc. (RYL). The company operates in the Southeast and West regions. It operates in the mid-level home with an average selling price in the mid-$200,000 levels. The company appeals to first-time, second-time, and move-up homebuyers.

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