It comes down to if you believe in management and think that management knows what they’re talking about and with the slow Jan closings, will still be able to hit the more than 4700 homes closing number for 2017 (as Saul pointed out, more than an average of 410 homes per month for the remaining 11 months).
Well said. Really, they would have to be almost straight up lying if they aren’t seeing very strong sales. I guess we’ll find out in a couple months.
Also, who else are you going to trust? Wells Fargo? Ha. Their own recent indiscretions notwithstanding, they initiated coverage on LGIH on September 29th. 4 months ago. Guess what they said? Outperform! The stock was at $36. They dropped it to market perform in January and now underperform. So helpful, WF. If anyone followed their advice they bought at the all time high and are now being told to sell at the 45ish-week low. Great job, Wells.
Why is LGIH at a 45ish-week low? As Rich Smith awesomely mentions here: https://www.fool.com/investing/2017/02/06/why-lgi-homes-stoc…, it’s all one big ridiculous self-fulfilling prophecy. Wells set a target of 26 - 28 bucks a share. Well here we sit in that range right now. Just preposterous.
I bought a bunch more today, and I see a lot of short term catalysts for appreciation:
- Bounce back from the big drop today
- ASP increasing because of higher $ markets…hopefully EPS increasing for the same reason.
- Big closing months coming up, for example because they couldn’t quite get something closed in January so it rolled to Feb.
- Increased closings from new markets
I’m sure there are more. But the point is, this is a huge overreaction. Buy low and sell high, my friends. (In other words, don’t ever listen to Wells Fargo.)
Bear