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Bull of the Day: D.R. Horton (DHI)

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There are plenty of tailwinds for stocks right now. You read that right, I said tailwinds. Sure, the COVID-related shutdowns have put a huge damper on things. The market is forward-looking. It realizes that we will get out of this mess eventually. It’s the reason why so many stocks are flying high. There are some areas of the market that have been surprising though. Among them are the home builders. I didn’t realize just how good things have been.

It makes sense when you take it in the context of record low mortgage rates combined with a mass exodus from cities across the nation. Folks are packing it up for the suburbs, and have been leaving higher tax states for lower tax states since the tax code was changed.

Today’s Bull of the Day is a company benefiting from all these tailwinds. I’m talking about Zacks Rank #1 (Strong Buy) D.R. Horton (DHI - Free Report) . D.R. Horton, Inc. operates as a homebuilding company in East, Midwest, Southeast, South Central, Southwest, and West regions in the United States. It engages in the acquisition and development of land; and construction and sale of homes in 20 states and 51 markets in the United States under the names of D.R. Horton, America's Builder, Express Homes, Emerald Homes, and Freedom Homes. The company constructs and sells single-family detached homes; and attached homes, such as town homes, duplexes, and triplexes. It is also involved in the origination and sale of mortgages; and provision of title insurance policies, and examination and closing services, as well as engages in the residential lot development business. 

The reason for the favorable Zacks Rank lies in the series of earnings estimate revisions coming from analysts. Over the last 60 days, thirteen analysts have increased their earnings estimates for the current year while eleven analysts have increased estimates for next year. The bullish sentiment on Wall Street has increased the current year Zacks Consensus Estimate from $4.54 to $5.27, while next year’s number is up from $4.30 to $5.55.

That has helped underpin a rally in the stock from $29 in March to over $67 where it closed today. That’s well north of the previous high earlier his year in the $61 handle.

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