LGIH May closings

Only 572. Ugh.

LGI Homes, Inc. (Nasdaq:LGIH) today announced 572 homes closed in May 2018, up from 523 home closings in May 2017, representing year-over-year growth of 9.4%. The Company ended the first five months of 2018 with 2,422 home closings, a 46.9% increase over 1,649 home closings during the first five months of 2017.

As of the end of May 2018, the Company had 76 active selling communities.

Absortyion rate was 7.5 Problem was only 76 selling communities. I was expecting at least 80. In my
April 6 analysis of their communities they listed 106 communities on their web page. 11 sold out, 5 “last homes” leaving 90. 6 more were “coming soon” leaving 84 with 13 grand openings scheduled. So they moved only 5 of the grand openings into active selling. Doubt the market will treat the news kindly.

Good news is that the other 8 grand openings will give them 86 (less any additional sold out/last homes).
89 is, I think, the year end target. I have 3 targets for year end closings: 7056, 6500, 6000 (my high estimate, their midrange guidance, their low guidance). With 86 average community count, that requires absorption rates of 7.7, 6.8 and 5.9. 7000+ closings still within reach. Still seems sales are limited by available inventory.

Might get another buying opportunity today.



Well lets hope the year on year compares are positive for the remainder of the year and that have a benign tornado or hurricane season (or whatever you call those things in the US) from a human perspective as well as a LGIH perspective.