Ailing national homebuilding giant Hovnanian Enterprises saw its stock and debt downgraded by a major ratings agency yesterday, but investors bid the company’s stock up neatly anyway.
The price of a share rose 70 cents, or almost 12 percent, to $6.63 today, continuing a recent climb out of a basement. For the first time in seven years, Hovnanian shares were trading below $5 last week.
Earlier in the day, Standard & Poor’s put the Red Bank-based company’s debt on credit watch with “negative implications” and downgraded it’s preferred shares after the company failed, as expected, to make a dividend payment to shareholders Tuesday.
Both moves were made pending completion of Hov’s negotiations with lenders over credit terms.
Forbes has an Associated Press story about the latest developments.
At least one insider views the depressed share price as a buying opportunity. Forbes also reports that founder and chairman Kevork Hovnanian of Rumson bought 379,100 shares at prices ranging from $5.08 to $5.50 last Thursday and Friday.
Hovnanian has been sufferering along with numerous homebuilders and lenders through a collapse in real estate sales over the past year or more.