CHCI did an interview in the Wall Street Transcript where they said they hedge the materials cost in their backlog. I think it going down means nothing, just random fluctuations, especially since volume is only 1/3 of the usual. I remember last Summer when my MTH stock went down/sideways for months only to double in the following six months. I always say, watch the company/industry, not the stock price, otherwise you get shaken out at the very bottom and then it takes off. Currently all HB stocks seem to be just bouncing around randomly, some going up, others down, with no news. But you can't use the stock trend as a predictor of what happens next. The Chartist in Thestreet.com has in the last few years said "sell" a few times for HOV AFTER the stock had dropped. It usually turned out to be near or exactly at the bottom. HBs offer a rough ride, but you need to hang on for the long-term. On CHCI'w website is this investor presentation: http://www.comstockhomebuilding.com/investorpresentation.pdf It shows that median family income is almost as high as San Franciso, but home prices are much lower, so affordability is not a problem. DC is also the fastest growing area in the USA.
What did you mean that they hedge materials cost in their backlog? Did the buy some type of commodity? I have been buying on dips and it is becoming harder as I watch it go lower. All the numbers say this is a winner. What you said give me more holding power.
To quote from the interview: "We certainly by ahead on raw materials. We make sure that our backlog in covered in term of raw material contracts... So far, the market has been fairly elastic because of its ability to absorb any materials cost increases."
Added more at these levels; current valuations imply doomsday scenario for this stock, which I just can't envision at this time. The company's recent press release also signals to me their frustration with the stock price...I would like to think that management would not be putting out bullish press releases if they felt that their previously-issued earnings guidance was in jeopardy.