Jan home closings
232 homes closed in January, up 51.6% from 153 in January last year.
Sounds good to me. Incredibly good in the face of all the gloom and doom which has pushed the stock price down to a PE of 9.8!!! Yes, that’s 9.8 !!!
Saul
Jan home closings
232 homes closed in January, up 51.6% from 153 in January last year.
Sounds good to me. Incredibly good in the face of all the gloom and doom which has pushed the stock price down to a PE of 9.8!!! Yes, that’s 9.8 !!!
Saul
Below is the running total and YoY increase by month since the beginning of 2014:
**2016 2015 2014 2015-2016 2014-2015**
JAN 232 153 119 51.6% 28.6%
FEB 220 156 41.0%
MAR 298 210 41.9%
APR 267 191 39.8%
MAY 255 228 11.8%
JUN 331 243 36.2%
JUL 311 174 78.7%
AUG 320 183 74.9%
SEP 303 200 51.5%
OCT 264 241 9.5%
NOV 249 165 50.9%
DEC 433 246 76.0%
TOTAL 4000(E) 3404 2356 17.5%(E) 44.5%
Saul,
Why do you think the P/E’s are so low for LGIH and other home builders (like DHI) who have been growing rapidly?
Thanks,
Bear
Who knows what the market is thinking.
Though if I was to throw out a wild guess it would either be because of the fear of the loss of oil jobs in texas may hurt housing demand.
Or
The earnings aren’t necessarily dropping down to the bottom line as cash on the balance sheet. It looks like the company is investing it all plus some with debt into buying new lots for future growth. Not necessarily a bad thing if kept in check.
Or
The markets are just being crazy pricing most every small cap growth stocks at ridiculous valuation. This could possibly signal a great buying opportunity for those with a long term outlook.
Though as always do your own DD
Best,
Soth
Who knows what the market is thinking.
Don’t know what the market is thinking but this is what I see -
Oil has been crashing causing many distressed oil companies with ineffective hedges to be at serious risk of insolvency.
Lots of bank debt related to those oil companies is a big macro problem.
Rates are not rising and the fed cannot effect long term rates directly and the yield curves are falttening - more trouble for banks.
DB in Europe looks like their version of Lehman from 2008.
Tons of money flowing to Yen. That’s the carry trade unwind. Yen strength = risk off in equity assets
Could go on, but in that macro picture the selloff is quite sane for the market unfortunately… but the question is about the stocks/businesse itself so…
…That said, LGIH looks like its getting to the point of being a good deal. Most volume in the stock since IPO has traded in 17.5-19 range. If the business keeps performing well, I’d be surprised if the price goes much lower than where it is. The 19 level has shown sharp responsive buying in spite of broader selloffs suggesting that is where most LT holders consider it a great value.
May start accumulating some here.
Thanks, but the question was really about home builders as an industry…any idea why the average P/E is so low (compared to other industries)?
Ah, misunderstood the question… was looking for historical averages, but not finding anything on my quick search, but the sector is off about 20% YTD so that is a piece of it I’m sure.
In general its a more cyclical industry too so generally doesn’t lend itself to high PEs except in the upswing of cycles when they get into favor as I understand it. Only so fast you can grow when the growth is tied to building stuff that takes time to complete
Why do you think the P/E’s are so low for LGIH and other home builders (like DHI) who have been growing rapidly?
Hi Bear, I don’t know anything about DHI, but with LGIH, the fear has been that low oil prices must be making people reluctant to buy houses in Texas where LGIH has built 50% or so of their houses. Since they sold a lot of houses in the fourth quarter in spite of oil prices being low now for a year and a half or so, that prediction may not pan out. But who knows?
Saul.