Cramer Says KB Homes (KBH) is a Buy Since Options Scandal is Mostly Behind

Cramer discussed the CEO having resigned from KB Homes (KBH). cramer has interviewed him before, but he says you have to go buy shares of KBH. Cramer said the options scandal pressures a stock down, then it inches up, and then on the resolution you have to buy. With the CEO resigning, that is now out of the way.

Cramer said that even if you back-date options you have to think you are looking out favorably on the company down the road anyway. If a CEO was willing to take stock over cash then you should be inclined to take his lead. He thinks at 1.25 times book value that is a very cheap price. It has almost no debt. It could be a takeover target because it is so cheap. Cramer thinks private equity buyers could do it, or even a Lennar (LEN).

KBH is widely and wrongly perceived as a California and Las Vegas homebuilder, but that isn't true. CA is now 31% of sales as they are in 13 states. When CA comes back, so will KBH. It also builds award winning neighborhoods. He said he didn't like it when the shares were super-high, but now closer to lows he likes it. He thinks right now is when you buy it.

Jon C. Ogg