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Beazer Homes USA Inc. Message Board

  • x_ibmresearch_employee x_ibmresearch_employee Aug 31, 2007 3:24 PM Flag

    91.9% OF THE FLOAT IS SHORT!? WOW.

    http://www.shortsqueeze.com/index.php?symbol=bzh
    Shares Short 26,466,100

    A little less than half the revenue of KBH, but 1/7th its market cap? Can you say oversold much.
    http://finance.yahoo.com/q/co?s=BZH

    With institutions owning 115% of the company, Beazer appears ready to explode on any positive company specific development. Event risk appears weighted toward the shorts.

    A bottom fishers dream...
    x

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    • While I still think that BZH will likely go bankrupt in the next 6 months, with 91% of the float short, it would be very possible to see it double in the short term on a short squeeze. This is BZH specific, as no other HBs have such a high short interest (see below). I am very willing to play this stock both ways.

      The Sept $12.50 calls are going for 0.50/0.55 and the $15 calls are 0.1/0.2 as of the close on Friday. These are fairly cheap "lottery ticket" type plays that could pay off big.

      It may not need a catalyst, but the next FOMC meeting is Sept 18th where they are expected to lower the fed funds rate. Sept calls expire 3 days later on 9/21.

      For comparison, I looked up a couple other homebuilders...

      TOL - 19.5%
      KBH - 31%
      HOV - 59%
      NVR - 27%
      CTX - 17%
      PHM - 16%

      For another comparison here are some other stocks...

      HD - 3%
      WMT 2%
      GM - 11%
      BAC - 1%
      CFC - 16%
      MTG - 33%


      NeoDoc

      • 1 Reply to neodocjdg
      • <<It may not need a catalyst, but the next FOMC meeting is Sept 18th where they are expected to lower the fed funds rate. Sept calls expire 3 days later on 9/21.>>

        Have it ever occurred to you that on every FOMC meeting, the market had sold off?

        Furthermore, since majority of the people are "expecting" the Feds to lower interest rate at this meeting, it will add more fuel to the fire on the market sell off when the Feds will NOT lower interest.

        If and when there is a rally in the HBs, I would love to short it down again!

 
BZH
6.62-1.98(-23.02%)Feb 5 4:02 PMEST