LGIH reported monster results



Will be interesting to hear what they have to say about June and July home sales, and August so far if they will divulge it.


They said between 350 and 380 homes for August. Better than June and July, but still sub 20% growth YoY.

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340 to 400 avg closings per month for the rest of the year. Very unimpressive compared to their last few years. 340/mo for Aug-Dec would represent 8% more closings than in the same period in 2015. Sure, 400/mo would represent a 27% increase, but given that they’ve only achieved 400+ homes twice ever, I don’t expect that to be the case on avg for the rest of 2016. Of course, all depends on the housing market. Low rates help, for sure, but I’m starting to think perhaps the low hanging fruit has already been plucked. But more than anything, I’m distinctly less optimistic after 2 months of slow and even negative growth in closings.



I’m tending to agree Paul. With rates about to rise, house closings growth rolling over and the slowdown in the overall growth rates, if this wasn’t so undervalued there might have been a rush for the exit.

My only question is whether typically LGIH has tended to lowball expectations on housing numbers etc and whether they are likely to surpass this comfortably?


David Kotok of Columbia Advisors has gained my respect over the years as a wise investor. He is very worried about the bond market, with rates so low that when the music stops there won’t be many chairs to sit in. That said, he said the place to be is US home market. Homeownership rates are terribly low (maybe back to the 1960’s?), there is a large built up demand. He sees it starting to pick up and sees it as a long glide path after the long disaster since 2008. He thinks a good 5 years. Likes home builders and related (e.g. building suppliers), but did not name any particular stocks. Makes me continue to like LGIH. I also have positions in MAS, BECN, EXP,

Way busy at work, so no time to prove their worth, here are the quick IBD ratings:

MASco (very strong growth)

Composite Rating 96 Pass
EPS Rating 97 Pass
RS Rating 86 Pass
Group RS Rating A Pass
SMR Rating B Pass
Acc/Dis Rating A Pass

BECN (roofing supply) - good growth

Composite Rating 87 Neutral
EPS Rating 85 Pass
RS Rating 81 Pass
Group RS Rating B Pass
SMR Rating B Pass
Acc/Dis Rating C+ Pass

Composite Rating 91 Neutral
EPS Rating 96 Pass
RS Rating 77 Pass
Group RS Rating A- Pass
SMR Rating B Pass
Acc/Dis Rating C Neutral

These are not the strongest stocks but pretty decent, but if you are heavy in LGIH, these might make you too concentrated.


Bought all of my LGHI shares in Jan, Feb and March. Most at $19 to $20 per share. So I’m up 75%. I sold some shares a while back and now have a 9% position.

I have recently been having some (maybe groundless) thoughts about the overall real estate market’s short term future. And what the next LGIH quarterly report might be.

PuddinHeads post cheers me up.

Thanks PuddinHead,


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PuddinHeads post cheers me up

Like that’s not a jinx :wink:

I meant the content of PuddinHead’s post.

Not PuddinHead himself.