Ryland, KB Home Gain on Sector Stability

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Two Los Angeles homebuilders surged in early trading Wednesday after an analyst predicted there would be no more mergers in the housing construction sector.

Ryland Group in Calabasas gained $1.23 or 7.2 percent to $18.24 and KB Home of Los Angeles rose $1.73, or 12 percent to $15.99.

Daniel Oppenheim, an analyst at Credit Suisse, wrote in a research note that Ryland was one of three most attractive takeover targets in the unlikely event of future consolidation.

Speculation about homebuilding mergers has increased since April 8 when Centex Corp. agreed to buy Pulte Homes for $1.3 billion. However, Ivey Zelman, an independent stock analyst who specializes in housing, believes it’s easier for homebuilders to buy raw land rather than acquire a competitor.

In the last year, shares for both KB Homes and Ryland have lost about two-thirds of their value.

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