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CCS up about 4% after this homebuilder reported earnings of $1.48, a 55c beat. New orders were also very strong, +57% yoy.
MDC also reported Q3 earnings of $1.48, a 28c beat over estimates. They also increased their dividend and reported new home orders in Q3 were very strong, up 73% yoy.
Lots of good buys in the sector after recent sell-offs, imo.
MHO and TMHC both reported strong beats and also an amazing 70% increase in orders last quarter (yoy). Strong order growth continuing into October too. It takes 6 months or so to build those houses so great numbers should continue going forward. Great times for the homebuilders and as R59 noted, most are higher today despite that steep 800 pt drop in the market today.
Sorry for the confusion, value1008. I edited my post.
Edit: I also added a comment to the story on SA, which is probably what you were referring to.
BGFV Big headline by an editor of SA says:
Big 5 Sporting Goods misses on revenue
Oct. 27, 2020 4:24 PM ET|About: Big 5 Sporting Goods Cor... (BGFV)|By: Shweta Agarwal, SA News Editor
Big 5 Sporting Goods (NASDAQ:BGFV): Q3 GAAP EPS of $1.31.
Revenue of $304.96M (+14.6% Y/Y) misses by $7.55M.
Same store sales +14.8%
(End of story)
My comments:
On their Q2 report, BGFV guided for a revenue increase of 14-20%. So while it was closer to the lower end of their estimate it was within their target range.
The SA editor could have just as easily said that the earnings beat the average estimate by 14% or 16c. He should at least have said that earnings were a beat and by how much.
Apparently he favors the shorts.
HBP The BOD rejected the $4/ share offer, claiming it is inadequate. I think it was a very fair offer considering that the company has not been profitable since 2016 and it is at 3X BV. HBP strikes me as a company with good products but lousy management.
Earnings and CC come out later this week. I expect they will be questioned about it. The stock hasn't really sold off so investors look to be wondering if an even higher offer is coming.
BGFV Just a thought but maybe it is sold out so they took it off the website.
NTGR Today seems to be the day that investors run away from good news. This one is definitely a beneficiary of the pandemic. Joined you with an opening position.
Also reminds me that I need a new router as mine is outdated. I'll check out netgear's selection at best buy.
Home builders have definitely been in correction mode recently, many are down 8-10% in the last two days. Besides TPH strong earnings report, PHM and MTH also just announced great numbers and they are greeted with large sell offs too.
PHM beat by 19c with net new orders up 36%. MTH beat by 46c with new orders up 70% yoy.
I've been adding more in the group this morning. MHO is probably my fav right now. They report next week. Last quarter they beat by $1.00 earning $1.89. Orders in June were up 79% yoy and they also said in their last CC that surge continued into the summer.
BGFV That Lake Street analyst is one of the top analysts, ranking in the top 2 to 3% of professional analysts. Sure hope he is right on this one!
https://www.tipranks.com/analysts/mark-smith
ASO I did put in a sell order for about 1/3 of my position at 15.60 this morning for a quick 20% profit but that seemed to start a reversal (nothing new for me it seems) and I don't have a fill.
BGFV remains a larger position and I sure like seeing that new $15 target by the Lake Street analyst. Hope to see this one hit double digits after earnings next week.
ASO Might as well as add this recent IPO to the P/S list of sporting goods stores.
With 4.8 Bil in revs and 1.2 B mkt cap, it is close to BGFV but does have some debt too.
Prices to sales
DKS .66
HIBB .62
SPWH .65
BGFV .21
ASO .25
Lightened up on BGFV today, but still bullish on BGFV and ASO.
OT Don't forgot there are always new people moving into the seniors category that likely exceed the number of those who pass on.
I know there are many who disagree with me, including some on this board, but to this number crunching finance guy; it is insanity to support the Biden-Harris ticket that is proposing $4 trillion in new taxes and $36 trillion in new spending over the next decade just because you don't like Trump.
RFP I hold some shares in this one too. I've been watching lumber prices closely. Futures have been trading lower in spite of many home builders reporting record orders. TOL recently reported that orders in August and into mid September were up 110% yoy. November lumber futures are at $545 which can be partially explained due to slower construction activity in northern climes. But March 21 futures last traded at 421 and Sept 21 futures last trade was at 403. This compares to the expired Sept 20 contract which traded up to nearly 1,000. That is a real head scratcher to me although lumber futures lack liquidity with low trading volume.
I expect lumber prices will again rise dramatically next year as we get into next spring's active building season.
AMRK Decided to take some nice profits in this one at 37.27 I really don't understand their business model well enough to stay with it. Thanks hweb for bringing this one to the board.
Income taxes have been increased retroactively numerous times. A notable example is the year after Clinton was elected along with a Democratic majority in both the Senate and House.
The tax reform act of 1993 increased the top federal income tax rate from 31% to 39.6% , increased the corporate income tax rate, raised fuel taxes, and raised various other taxes.
Hang onto your wallets if we see a blue wave.
Well said, bbotcs, I and probably many others who are active on this board, have a good portion of our income generated from capital gains. When feasible, I try to hold positions for a year or more to qualify for the much more attractive long term capital gains tax rate.
Eliminating the LTCG rate, will more than double the tax bill for those qualifying trades. And NO, Mr Biden, I do not make more than $400,000 per year either.
As for the proposed increase in the corporate tax rate from 21 to 28% I do care. Stock prices generally reflect what the expected future earnings are. Raising corporate rates by 33% will bring a 10+% reduction in earnings going forward. So that could well mean a 10% drop in stock prices to reflect that. Most economists also say it is a big mistake to raise taxes when we are in a recession. Throw an increasing regulatory environment on top of that and I suspect many of us will watch our capital gains evaporate.
CCS up about 7% on that big upgrade. Nice to see that the analysts are waking up to the fact that the home builders have entered a golden age of strong demand as people want their own homes and private spaces combined with inventory shortages and super low interest rates that should last for at least 2-3 years.
My main concern is that a blue sweep is now looking likely. That will bring more huge stimulus spending just about the time we have vaccines available to control covid. Parties are fun until the inevitable hangover hits hard.
ASO Interesting article on SA. I wish the author had gone deeper into the relative financial metrics. ASO earned 73c last quarter and I can see them earning $2 this year, so I remain mildly bullish with a small position. Note the author was neutral. I will probably add more if it drops into the $12's.
DIIBF has nearly doubled since I first posted about it here in late July. The sporting goods sector is hot.
ELSE hweb, it could well have been you that pointed out this one so thanks.
Sold too soon though at $5 as it is now pushing 6. Over 8 mil shares traded with only 3.7 mil os. I don't know that this economy needs any more stimulus, not with this kind of action, lol.
ELSE this former sleepy stock up 50% today on huge volume. I don't see any news to account for it. Bought it a long time ago and kind of forgot about it. Happy to take profits on this run up today. thought I'd mention it as I may have heard about it from someone here. I suspect it is being touted to the momo crowd.
TOMZ That webmd article I linked to warning about the dangers of contaminated surfaces is dated august 20, so it is fairly recent. It recommended daily cleaning of hard surfaces to fight covid.
That is an interesting comment from gilead on how there have been no PRs announcing new contracts lately. Could be, although I thought they were being quiet while they pursued their nasdaq listing.
Lots of volume today. Hope the momo traders chase it again.
TOMZ Sure, covid is most easily spread by droplets from sneezing or coughing but it can live on hard surfaces for up to several days. Touch that surface and then touch your face and you can get it that way too.
https://www.webmd.com/lung/how-long-covid-19-lives-on-surfaces
ASO Looked at this one last weekend and opened a position this morning. So far, so good. Not cheap compared to BGFV but looks attractive compared to SPWH and DKS which are more comparable in terms of size. The sector is doing well today. BGFV is now up but not that much, so far anyway.
ASO Hweb, I'm having trouble finding financials on this new IPO. Can you provide further info/ link, thanks.
TOMZD would have been a great buy near the open after the news of approval for a listing on the nasdaq. Stock now up about 20% today.
Of course it is highlighted among the Trump hating press. First, there is no proof that those are actual tax returns. Even if they are, I'm sure Trump has separate corporate returns for his businesses. And since he donates his entire presidential salary to various govt agencies, maybe he doesn't have any income to report from his current full time job.
If you want to clutter up the board with that Trump bashing BS, maybe we should also talk about the evidence of Biden's dementia. There is no way I think he has the mental faculties needed for probably the most stressful job in the world. And then there are the millions that his low life son collected from various foreign governments using his dad's influence.
Please keep that crap off this board. There are plenty of political hatchet boards elsewhere for your pleasure.
JNPR Decided to join you on this one. It sure looks like strong support here
NYMT Sure seems odd that this one is down with the div increase, even after allowing for the fact it is ex-dividend today. I just opened a small position in it. Surprised this high yield stuff is not doing better with the ultra low yields out there.
I do own some NYMTN which is a preferred they have. At least that one is up nicely today. Likely investors feel there is less risk with the preferreds since they can hike the divie on the common.
R59, that's a great list of home builders to hold. I have done some trading in and out of individual stocks in the sector. Here is a list of my current holdings in order of largest to smallest positions:
CCS TOL MDC MHO TMHC BZH TPH NWHM
BZH preannounced strong growth in orders the last two months and is nicely up on that news today. I think that virtually all of them will report some blowout numbers for calendar Q3. The challenge will then be getting all those houses built on time and on budget.
If I was a large builder, I would be locking in lumber prices with futures for next spring and summer. They can do that now at only $400-450/1000 bf. That could also be a good trade for a commodity futures trader, imo.
TOL It's mind blowing that TOL has more than doubled its new orders yoy in August through mid september. Toll is a large company averaging nearly
$2 billion in sales per quarter. The hard part will be getting all those houses built on time and on budget particularly considering they do higher end homes requiring more skilled tradesmen. We've talked about large increases in lumber prices reflecting increased demand and shortages and I also hear there are shortages of other components needed in home construction like appliances and light and plumbing fixtures.
NWHM also came out yesterday and said their new orders in July and August were up 100% yoy! I recently reopened a small position in that one so got lucky on my timing there. I also have opened up a small position in BZH too. Both stocks are selling at a fraction of book value and more leveraged, which can be a good thing when business is booming right along with record low interest rates. I remain bullish the sector.
MHO is also one of my favorites. I think we have entered a golden age for home builders. The Fed says interest rates will remain very low for 3 years or more. On top of that, Covid and unrest in the cities have made people suddenly very appreciative of moving to the suburbs in their own private homes and spaces. There is also a shortage of used homes for sale. Partly due to covid and partly because the supply of new homes has been under the needed replacement rate for 11 years now.
MDC, another builder, recently reported that new orders in July and August were up an amazing 75% yoy. Today is mostly a debbie downer day for the group as the whole market is tanking but I remain bullish.
BGFV There was a negative article about it last friday on SA. Author claims they have a poor online presence. Flies in the face of the video that hweb posted last weekend about hiring 50 more people to fill those orders.
TOMZD just became tradeable at my TdAm account. I liked it better when they weren't as it is down 19% today. Ouch.
TOMZD Mine still look like they are untradeable at TdAm. Hopefully that uplisting to nasdaq happens soon.
MDC This homebuilder is up 6% on news that new home orders for July and August are up an amazing 75% yoy. No wonder lumber prices have been so strong.
LEN came out with earnings and a nice beat: Q3 GAAP EPS of $2.12 beats by $0.56. Revenue of $5.87B (+0.2% Y/Y) beats by $340M. They also increased guidance. Buy the rumor, sell the news though as this one is down about 2% now.
Lennar also has an interesting price anomaly on its two classes of stock. LEN and LEN.B. Both are exactly the same except that LEN.B has 10X the voting rights of LEN. One would think, if anything, LEN.B might trade at a slight premium. But no, it trades at a 20% discount to LEN. A couple activist groups who hold LEN.B are after Lennar to convert all B shares into A shares, so that could be a possible trade although Lennar has resisted doing this in the past. The CEO owns most of the LEN.B shares so he would ironically benefit the most if they did consolidate them.
Good article about the rapid increase in lumber prices. Now, the huge wildfires on the west coast are also crimping the supply too. Lumber price increases have already raised the cost of a house over $16,000. This may be why home builders are mostly flat today. LEN, an industry leader, announces earnings today and I suspect they will be a big beat. That could trigger rally mode for the group again tomorrow.
https://finance.yahoo.com/news/lumber-staggering-rally-homes-selling-110023301.html
AMRK went to place a limit order with TdAm and was told I have to call it in with a broker. Weird for a nasdaq stock.
TOMZ Ha, good for you. The only thing I have been eating with this one is crow for dinner. Down to an annualized PE of 7 with a rapidly growing business....doesn't matter although it was about
the only stock I own that was up today.
Other than TOMZ, it looks like airlines and cruise ships were about the only winners today. Traders are a strange bunch.
HIBB Building nicely on its recent gains. Their guidance sure doesn't seem to bother investors. I've never been in a HIBB store, but aren't they more about clothing and apparel, where BGFV is also big in sports gear and supplies