What is KB’s real motive/opportunity here?

Implications: The consensus for the future as now laid forth for investors by the housing industry is that there can be no consensus currently. There just are too many variables to make a wise call guided by historical trends, it is said. And no one among the investors or the media today rises to dispute that forecast, which permits KB and other prudent and strategic thinkers to make a run without tipping their hand as to the alternatives. So we’re left free to suppose too what the smart moves are. We might think about a wide range which might include the future possibilities set out below.

Analysis:

1. KB Homes will invest in another industry, recasting itself like its founder for deeper waters in say the financial arenas. Whether the company likes insurance or building materials or privatization of various activities formerly provided by government such as infrastructure or a variable of private equity, we are open to searching the fringes for clues;

2. KB might have a plan to become the lion in the U.S. home building industry through acquisitions thinking that there is a parallel between the history of the auto business and homebuilding. This is heresy to those who believe there is superior design and performance to be had from a fragmented industry. Granted there was a quantum leap in eye appeal and useful space in the past twenty years, most of the good stuff came from the big guys whether it was land development or building construction;

3. KB has given up on France as being an economy which will not provide superior growth and profits in the home building business or elsewhere. The better leverage may be available in India or China where the populations are more cohesive or united. The run to civilization may be longer and deeper there.

The new management and a strong board may have a free run at the future without the need to cover a past crafted by the previous administration. Maybe its recent adversity has given it an advantage when maneuvering to clear the current clouds which is not shared by its competitors.