Investors are buying on future projections to profitability. If you notice, there were not the big write downs this quarter. If PHM has taken all it can, then their numbers will look great going into the future. Furthermore, the write downs they have taken in the past put their cost base down so that it will be easier to make profits on future sales.
Look for sales to pick up as well to give profits another boost. With better housing numbers and good numbers next quarter, I am still projecting a major move in the price this summer and running into the fall.
Their level of inventory are $4.7 Bil, assume $4bil is land, since they have 180,000 lots that is an average of $22,000 per lot. This is about 10% of average sales price- usually land is 1/3- a lot of future profits are built into those low cost lots number (this after all those huge write downs which now are history)