LGIH announces results

Since there was a lot of worry about the future as opposed to the past, here’s their outlook:

In management comments;

As we turn our attention to 2016, we remain focused on continuing our trend of strong results. Through February 2016, we have closed 477 homes, an increase of 28% over the first two months of 2015. We hold a positive outlook on 2016 and believe the demand for homeownership in all of our markets is alive and well.

We are poised to see continued growth and to meet our goals and objectives for 2016 through adding community count in our current markets and by improving community absorption in our newer markets. We expect all of our start-up operations in new geographic markets, including Colorado Springs, Seattle, Nashville and Raleigh, will generate home closings in 2016. Overall, we expect to close between 4,000 and 4,400 homes for the year and believe basic EPS for the full year 2016 will be in the range of $3.00 and $3.50 per share,” Lipar concluded.

Note that closings estimate is an increase. Last time they just said at least 4,000. Now it’s “4,000 to 4,400”. Also basic EPS (they didn’t say “diluted EPS”) of $3.00 to $3.50 is up from $2.65 this year.

And from the Outlook section:

…the Company offers the following guidance for 2016. The Company believes it will have between 62 and 67 active selling communities at the end of 2016, close between 4,000 and 4,400 homes in 2016, and generate basic EPS between $3.00 and $3.50 per share during 2016. In addition, the Company believes 2016 gross margin will be in the range of 26.5% and 28.5% and that the average home sales price in 2016 will be between $190,000 and $200,000…

The midpoint of gross margins is flat from this year.
The average home price was $185,000 this year, so a prediction of $190 to $200 doesn’t show run away prices, but doesn’t show price pressure either.

They gave $2.44 for adj eps for 2015, but if you add up the four quarters that they gave, it comes to $2.50. Either way the PE is under 9 and seems like a bargain to me, barring a stock market or housing market meltdown.



The market certainly liked what they said as well, stock up 9.71% on 154% increase in volume. It is still fighting to retake the 200dma, but I suspect that will come now with the good earnings and outlook.


Notice the blue line provided support last few days, probably a coincidence.

US economy looks to putter along, seems like Fed is not eager to jack up rates, nor does the economy justify it. So same ongoing environment for LGIH, which seems to be fine.

Despite what you might think of the two leading presidential candidates, I don’t see either one causing a disaster. But let’s not start a debate about that :wink:

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