I absolutely do not believe for one moment the earnings report for MTH. I believe they have fixed the numbers and glossed over the real picture. They are in the worst housing market area of the US and to believe that they are increasing sales is unbelievable. I do not beleive that they have 160M in cash either. No other homebuilder has painted such a rosy picture, complete lies and deceit.
From today's financial articles./
Disturbing fact, Foreclosures
Foreclosures used to be mainly confined to low income areas. The most recent figures from Zillow, however, reveals a concerning development. USNews reports that at the peak of the market, the top third of the property value spectrum made up just 16% of foreclosures. By July of this year, this most expensive segment of the market accounted for 30% of home foreclosures.
Based on future projections, this isn't just a flash in the pan type problem. Foreclosures are expected to rise from about 2 million currently, to 6.5 million by 2011. This cancer-like spreading of foreclosures even into the prior taboo-area of prime mortgages is directly correlated with a weak job market.
Not only is the 'official' unemployment rate quickly closing in on the foreboding 10% number, the average length of time unemployed, or without a job, has just reached an all-time record of 26 weeks or six months.
It seems like the real estate market is more aware of the seriousness of the issue than the stock market. While the S&P 500 (NYSEArca: SPY - News), Dow Jones (NYSEArca: DIA - News) and Nasdaq (Nasdaq: QQQQ - News) have all reached new highs recently, real estate ETFs like the Vanguard REIT ETF (NYSEArca: VNQ - News), iShares Cohen & Steers Reality Majors (NYSEArca: ICF - News), and SPDR Dow Jones REIT ETF (NYSEArca: RWR - News) are still trading significantly below their respective September recovery highs.
These guys are lying, the area of the country they build in is losing huge amounts of population by the day, and there are hundred's of thousands of foreclosures in evvery city they build in and they expect the investment community to believe they increased sales? Whatever. Stock will slide to $12 whithin a month.
If you look at the rosiest projections there is so little to convince me that this company can turn around. My hunch is they are not favored in the real estate community as they are offering huge incentives to get realtors through the doors. Other builders better entrenched in their communities, one's that truly have built longstanding relationships with the realtor community are not doing this. Desperation? When the market was rocking they cut their co-brokes and realtors like elephants just dont forget. C