december closings- 467 homes closed
quarterly - 1,139 homes closed
full year 2016 - 4,163 homes closed
Projection 2017 - 4,700
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compnay guiding 4700 closings in 2017 assuming market conditions remain the same. Any thoughts? My initial thought was number seemed a little light.
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compnay guiding 4700 closings in 2017 assuming market conditions remain the same. Any thoughts? My initial thought was number seemed a little light.
It will rise as the year goes on. The game is beating guidance and expectations.
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compnay guiding 4700 closings in 2017 assuming market conditions remain the same. Any thoughts? My initial thought was number seemed a little light.
Maybe, but they need to be a bit conservative since they don’t know what roadblocks they may run into opening new developments.
Or the news media spreading fear about rising interest rates. - This might actually speed up sales.
Last years comment on Jan. 7, 2016;
Assuming that general economic conditions, including interest rates, and mortgage availability in 2016 are similar to those in 2015, we believe we will close more than 4,000 homes during 2016."
Good guess, they beat it by 163 or 4%.
Should exceed $4 EPS.
JT
Annnnnd the meddlesome analysts can’t resist chiming in.
Wells Fargo cuts to market perform.
Wedbush reiterates neutral $35, coverage they just started one month ago.
https://stocknews.com/news/lgih-wells-fargo-cuts-to-market-p…
Keep in mind there is now a 5.7M share short position on LGIH.
This has grown all year from 3.4M Jan. '16.
Total shares 21M
Institutional holdings 17M
Float 17M (from Yahoo!)
17M Float + 5.7M short = 22.7M + Insiders shares
Lot of short money involved in this small cap, and it isn’t little guys like us…
One or more analysts will be “fronting” for these boys.
JT
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compnay guiding 4700 closings in 2017 assuming market conditions remain the same. Any thoughts? My initial thought was number seemed a little light.
It will rise as the year goes on. The game is beating guidance and expectations.
Median new single family home prices in Houston are about 225K. I could not find good data for Seattle, but from the links I gathered that a typical new single family home in Seattle cannot be bought for less than 500 K, The LGI homes in Tacoma are being advertised at about 350K. I would expect that the margins and gross revenues per closing would be higher.
Cheers
Qazulight
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Compare the numbers qazu threw out to LGIH’s avg sales price in the September quarter. I don’t feel like looking it up but I think it was about 205k. As they skew toward higher priced margins their margins may improve faster than some think.
Also, 4700 is nothing to sneeze at. Sure they’re not growing at 40%+ anymore, but double digit closing growth is great! Great! Crazy for a stock with a 9.5 PE. With the ASP rising, revenue could still grow at 20%+. And EPS may still grow faster.
Just seems like a steal under $30.
Bear
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That’s a pretty high shirt ratio, and it seems that a consensus of broker houses have this as a hold… not a much loved stock this LGIH. I have some TSLA proceeds cash but I can’t get myself to pull the trigger on LGIH
I pulled the trigger on some more shares today sub $30. This one’s becoming a larger percentage of my portfolio. I’ve added between $21-$32.
The high short interest is the biggest thing worrying me as I’ve been burned before buying shares of companies with high short interest when it’s turned out the shorts knew better than me.
But if LGIH keeps performing as they’ve been, I can’t see it going much lower. They really seem to be firing on all cylinders and performing well. And I really liked their December numbers that were reported upboard.
Looking forward to a good report, a resurgence in the stock price, and a higher valuation.
That being said, I could be wrong, all part of the fun of this whole stock market game, right?
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Looking at LGIH’s peers, Lennar seems a better loved and much larger enterprise. Short interest <5% and the PE and PS metrics more flattering with LEN
Might be better loved by investors, but certainly not by my son, who used to be a project manager for them…
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Care to expand or is it sensitive?
Wells Fargo cuts to market perform. - JT
Wells was projecting 5000 closing for 2017 and they are disappointed at more than 4700.
I would expect that the margins and gross revenues per closing would be higher
- Quaz
While ASP could raise by 2 to 3% I expect margins to come down a bit.
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I live in the Seattle area. $500K as the bottom of the market for a new house is probably not too far from the target, but as you get further away from Seattle downtown (implying longer commute in one of the nation’s worst traffic congestion areas), land values come down and so do real estate prices. LGIH has two communities in the area, neither are in a prime location, but so what. No one just entering the market (unless already well healed) can afford much of anything in a prime location as these homes usually go foe about a million on up. I could not afford my house if I wasn’t already living here (built in 1959, purchased by me for $103K in 1987).
I’ve not yet been to either one of the LGIH communities in this area, but my understanding is that they do not list with brokers in the MLS, they provide in-house sales and brokerage services which undoubtedly brings their house prices down. I think I recall reading that they even carry some of their own mortgage paper, but I could be wrong about that.
In other words, in that their primary target market is first time buyers, they have taken steps to perform outreach to these potential customers, and I think they also most likely do a pretty good job of undercutting the competition on entry level pricing.
Now, ask me about the heavy short interest? I don’t know, other than small to mid size companies without a lot of float often become short targets. It’s not hard to get “analysts” to carry water for big customers holding shorts.
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