LGIH Falling Behind Sector

Investment Analysis Clubs Saul’s Investing Discussions
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I’ve been in and out of LGIH and have been more on the negative side with this one. However, I’ve noticed a 5 month trend in the home building sector that is leaving LGIH way behind. Seems like they are due for a big pop up if they hold their forecast again on May 8th earnings date.


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so tab space return apparently sends a post… more to come.

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try again. I’ve been in and out of LGIH and have been more on the negative side with this one. However, I’ve noticed a 5 month trend in the home building sector that is leaving LGIH way behind. Seems like they are due for a big pop up if they hold their forecast again on May 8th earnings date.


**Symbol   GAAP P/E    Dec 1st to today's Price Change**
CCS       11.56              33% UP      
CHI       13.31              22% UP
KBH       17.95              36% UP
LEN       15.03              23% UP
**LGIH       9.11              2% DOWN** 
PHM       13.13              29% UP
TMHC      19.58              14% UP
TOL       16.49              25% UP
XHB       ETF                12% UP

This is a very large anomaly that does not seem justified. Really low P/E, about 26% behind 5-6 month trend of peers. Either the market knows they are going to lower forecast or this has alot of catching up to do. I may be going back in as we head to earnings to take another shot at this one.

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The data you posted already told us to stay away from this investment, P/E can change quickly in this industry as so many variables in input cost - labor, land, interest rate, etc. And the business model is one-time sale and no recurring revenue. But really worry me most is LGIH P/E is so much lower than other companies in same sector. I tend to believe market knows more than myself in this case. I would pass on adding any new money into this one. Would be safe to buy them at $40 vs. current $30.

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Would be safe to buy them at $40 vs. current $30.

This is completely backwards. Buy low, sell high!

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Really low P/E.

  • F1

Perhaps PE may not be the right way to look at it?

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Perhaps PE may not be the right way to look at it?

Investing in commodity products when the P/E is low doesn’t end well. When this is going on investors usually believe that sales are going to decelerate.

Andy
Who has played that game

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One more home builder, NVR:

P/E: 18.55; price change: 33% UP