Why Jim Cramer Is Wrong About KB Home

This video is part of our "Motley Fool Conversations" series, in which industrials editor and analyst Brendan Byrnes and consumer goods editor and analyst Austin Smith discuss topics across the investing world.

Jim Cramer, the storied investor and host of Mad Money, makes many daily buy or sell recommendations on stocks. In today's edition, Brendan discusses one bearish call by Cramer that he disagrees with. Despite a slight decline in sales in February, the housing market has been showing steady improvement. Building permits, which are a more forward-looking indicator, reached the highest level since October 2008, and builders sentiment is at the highest level in almost five years. Brendan believes that the rebounding housing market will help drive KB Home even higher. The stock is still relatively cheap, despite being up over 65% in 2012, it's still down 13% over the past full year.

While Brendan thinks KB Home is a solid bet to outperform in the future, it is closely tied to the housing market. If you're looking for a stock with less volatility, our analysts have come across a stock that has us so excited we can hardly contain our investing enthusiasm. We've uncovered one such pick with so much promise that we've dubbed it: "The Motley Fool's Top Stock for 2012." We've created a special free report for investors to uncover this soon-to-be rock star. The report highlights a company that is revolutionizing commerce in Latin America, and you can get instant access to the name of this company by clicking here to download it now.

At the time this article was published Austin Smith and Brendan Byrnes have no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above.Motley Fool newsletter services recommendThe Home Depot. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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