We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Zacks Value Investor Highlights: Toll Brothers, Lennar, PulteGroup, D.R. Horton and M.D.C. Holdings
Read MoreHide Full Article
For Immediate Release
Chicago, IL – September 16, 2022 – Zacks Value Investor is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here:
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
With stocks still in the red in 2022, it shouldn’t be surprising that there are plenty of values.
The homebuilders have been cheap stocks all year even as their shares have sunk. That’s because earnings have remained elevated this year as the builders deliver their backlogs, which were bought earlier when prices were at record highs and incentives were non-existent.
However, rapidly rising mortgage rates have led to an increase in cancellations and slower new orders, traffic in the sales centers and on the website.
It looks like the housing market will slow further into 2023.
Are the homebuilders true values or are they traps?
Definition of a Value Stock Versus a Trap
Remember, a true value stock and a trap can look very similar. They are both cheap, on a P/E basis. But a true value usually has rising earnings estimates year over year.
A trap, on the other hand, can appear to be cheap based on the current earnings but if you look closely, earnings are probably likely to decline next year.
Beware.
There are a LOT of traps out there right now as companies lower earnings guidance.
Lennar is one of the large national homebuilders with a market cap of $20.9 billion. Lennar is reporting its fiscal third quarter earnings on Sep 21, 2022 with its conference call on Sep 22, 2022.
We’re about to find out what is going on in the business this fall. Are sales still slowing? Have they stabilized? Are cancellations rising?
Shares of Lennar are down 36% year-to-date.
Lennar trades with a forward P/E of just 4.4 and pays a dividend yielding 2%.
D.R. Horton is a national homebuilder with a market cap of $23 billion.
Shares of D.R. Horton are down 36.5% year-to-date but over the last 5 years, shares are up 123% which is easily beating the S&P 500 during that time, which is up just 78.6%.
Shares are dirt cheap, with a forward P/E of 4.1.
It’s a Zacks Rank #3 (Hold).
Should D.R. Horton be on your shortlist?
5. M.D.C. Holdings
M.D.C. Holdings is one of the smaller national homebuilders with a market cap of $2 billion.
Shares of M.D.C. Holdings have plunged 47% year-to-date. They now trade at just 3.2x forward earnings.
It has been one of the highest dividend payers in the industry for over a year. That dividend is now yielding 6.7%.
Can M.D.C. Holdings still pay that juicy dividend as the housing market slows further in 2023?
What Else Should You Know About the Homebuilders in 2022?
Tune into this week’s podcast to find out.
Why Haven’t You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Zacks Value Investor Highlights: Toll Brothers, Lennar, PulteGroup, D.R. Horton and M.D.C. Holdings
For Immediate Release
Chicago, IL – September 16, 2022 – Zacks Value Investor is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here:
https://www.zacks.com/stock/news/1981116/homebuilder-stocks-values-or-traps
Homebuilder Stocks: Values or Traps?
Welcome to Episode #298 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
With stocks still in the red in 2022, it shouldn’t be surprising that there are plenty of values.
The homebuilders have been cheap stocks all year even as their shares have sunk. That’s because earnings have remained elevated this year as the builders deliver their backlogs, which were bought earlier when prices were at record highs and incentives were non-existent.
However, rapidly rising mortgage rates have led to an increase in cancellations and slower new orders, traffic in the sales centers and on the website.
It looks like the housing market will slow further into 2023.
Are the homebuilders true values or are they traps?
Definition of a Value Stock Versus a Trap
Remember, a true value stock and a trap can look very similar. They are both cheap, on a P/E basis. But a true value usually has rising earnings estimates year over year.
A trap, on the other hand, can appear to be cheap based on the current earnings but if you look closely, earnings are probably likely to decline next year.
Beware.
There are a LOT of traps out there right now as companies lower earnings guidance.
5 Homebuilder Stocks: Values or Traps?
1. Toll Brothers, Inc. (TOL - Free Report)
Toll Brothers is a national luxury homebuilder. 20% of its customers pay all cash. Who cares what mortgage rates are?
Shares of Toll Brothers have fallen 40% year-to-date. They are now dirt cheap, with a forward PE of just 4.6.
Toll Brothers has fallen to a Zacks Rank #4 (Sell) as earnings estimates have been cut.
Is Toll Brothers too cheap to ignore?
2. Lennar Corp. (LEN - Free Report)
Lennar is one of the large national homebuilders with a market cap of $20.9 billion. Lennar is reporting its fiscal third quarter earnings on Sep 21, 2022 with its conference call on Sep 22, 2022.
We’re about to find out what is going on in the business this fall. Are sales still slowing? Have they stabilized? Are cancellations rising?
Shares of Lennar are down 36% year-to-date.
Lennar trades with a forward P/E of just 4.4 and pays a dividend yielding 2%.
Is the selling overdone on Lennar?
3. PulteGroup (PHM - Free Report)
PulteGroup is one of the large national homebuilders with a market cap of $9 billion.
Shares of PulteGroup have fallen like the other homebuilders. They’re down 31.6% year-to-date.
They’re cheap, with a forward P/E of 3.5.
Earnings are still looking good for PulteGroup in 2022 as they are expected to be up 54% year-over-year. But 2023 is the real question.
Is PulteGroup a value or a trap?
4. D.R. Horton, Inc. (DHI - Free Report)
D.R. Horton is a national homebuilder with a market cap of $23 billion.
Shares of D.R. Horton are down 36.5% year-to-date but over the last 5 years, shares are up 123% which is easily beating the S&P 500 during that time, which is up just 78.6%.
Shares are dirt cheap, with a forward P/E of 4.1.
It’s a Zacks Rank #3 (Hold).
Should D.R. Horton be on your shortlist?
5. M.D.C. Holdings
M.D.C. Holdings is one of the smaller national homebuilders with a market cap of $2 billion.
Shares of M.D.C. Holdings have plunged 47% year-to-date. They now trade at just 3.2x forward earnings.
It has been one of the highest dividend payers in the industry for over a year. That dividend is now yielding 6.7%.
Can M.D.C. Holdings still pay that juicy dividend as the housing market slows further in 2023?
What Else Should You Know About the Homebuilders in 2022?
Tune into this week’s podcast to find out.
Why Haven’t You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
See Stocks Free >>
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Follow us on Twitter: https://twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch/
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com/performance
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.