Dont you guys see with all this bad news factoring in, countless subprime mess home builders at the low. The rate of decline from what it once was is getting smaller and smaller. Most quant funds are starting to buying HB's stocks now.. In the midst of all the hype and the stock barely moves lower is when the lows lows or so called bottom is determined.
Now as all the worst news is factored in most of the HB's are barely down, some of them up a few cents. We've seen this action in countless industries over the last 20 years.
It may not be the bottom, but if you are willing to take a 30% downward move from these levels you will be well rewarded in the long run. NVR reported earnigns today, still one of the best plays in the industry, things are bad probabyl get worse, then they will ease off and possibly get better.. Thats the way it works.
I guess no one will ever build a home again, the population increase has stopped, there is no need to expand or the need for homebuilder. At any price in any market, there is a buyer. This is the way it works.
We are very very close to a bottom, if we havent hit it already. If you buy MTH, KBH here and it goes 1-3 points lower.. add to it at these levels.. By the time everyone says the problem has gotten better and you want to buy this will be trading at 27-30.. and you will think or rethink to enter at that price..
Every once in a while you get great opporunities MTH, KHB, NVR, TOL.. this is one of them.. If anything buy some long term leaps.. atleast if you are scared you will know the max you will loose.. But at these prices it makes sense to just buy the stock..
To everyone that is long... good luck is not needed.. YOU WILL MAKE MONEY.. I bet when they report next friday, this will be at $15 prior to that or it will go higher right after they report earnings..
I'd like to buy a total of 30,000. Next buy will be about $10 then at $6.00 assuming no big bad news developement. I'm a value player. I try not to think to much about fundamentals as I believe more in the trying to figure how people will react to market conditions. Everyone seems to talk up a $6.00 range for this stock so it probably won't go that low. I like the fact they only have 24,000,000 shares out. It's going to be like Intel. I lost $60,000 first before I made $350,000. Too much gloom and doom so I'll zig when everyone else is zaggin. I've done alright in the past. It takes a bigger gamble than this to get my heart going. 1800% in ten years.
If this company settles in as a $2.5 billion revenue entity and manages just a 2% net profit it will make $2.00 per share. With a profit of $2.00/share it will sell for _____. (Please fill in the blank)
NVR bounced back from 400 to 480
SPF bounced back from 3.40's to 5
so are half of HB's
earnings to be better than expected for most HB's.
Bottom has reached IMHO.
Happy trading either way and I am just picking up some quality HB's incl MTH
cheers on the way up...patience.
Seen the quotations marks? If not, allow to repeat again: "multiple". And again, just in case, but really slooow: "M" "U" "L" "T" "I" "P" "L" "E".
Sorry, boss, just trying to be funny :)
Anyways, here is how this goes:
a) The opp can be returned to break even rather quickly -- go firesalewith 20% discount of current inventory.
b) Option "a" gives us over $30 a share easily. Not to be greedy I go with $20 for book value.
c) The above "a" and "b" give us safety net -- with so much in assets they will keep securing loans even if loan terms suck. This addresses BK concern -- none to be had unless books are cooked.
d) Liquidity... with Fed addressing liquidity this is a piece of cake. I am looking at some other stocks with good ops but bad dept and can't help but notice that markets are discounting credit sqeeze after the cuts were made.
e) From here there is significant upside with modest downside. For significant downside either has to happen: books are cooked, inventory is destroyed and not covered by insurance, credit lines are withdrawn, expenses go through the roof. All but first one are really remote probabilities, while first one happens to the best ofus. My "assurance" against book cooking is insider buying.
f)From here on shorts are fighting Fed. The nimble ones will do OK while jumping on either sell-off or profit taking trends although that's about it.
g) I am enering now to lock in the cap. gain in a year's time; I estimate this puppy will be over $20 by then if not earlier.
Naturally, this is not multiple-based evoluation although I did write "multiple" and not multiple.