RESEARCH ALERT-Wachovia starts Hovnanian with “market perform”

BANGALORE, Aug 12 (Reuters) – Wachovia Capital Markets on Friday
initiated coverage of Hovnanian Enterprises Inc. <_HOV.N_>
with a “market perform” rating.

In a research note, the brokerage firm said the eighth largest home
builder in the U.S. has a strategic focus on return on invested
capital (ROIC) and a strong land position in the supply-constrained
Northeast and California. However, 2006 growth will likely be largely
driven by 2005’s acquisitions.

It also said the company shares are traded at a slight 3 percent
premium to the group. It is a higher-risk, higher-reward concern and
the shares are fairly valued.

Shares in the New Jersey-based company closed at $61.51 on Thursday on
the New York Stock Exchange.

08/12/05 12:25 ET