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TGB Their Prosperity mine in Canada, assuming they can come to an agreement with the native indians there, is expected to yield about 7 million ounces of gold. Gold is hot these days at a 9 year high.
HZO Surprised to see virtually all its gains disappear from that very strong earnings report. Apparently when people can't go on cruises and international vacations they go out and buy a boat. I also think HZO will go higher and picked up a few after seeing nearly those big gains evaporate.
PHM Up about 10% on strong earnings and rev numbers for this home builder. Nice buy yesterday, RNsiders:
PulteGroup (NYSE:PHM) reported quarterly earnings of $1.15 per share which beat the analyst consensus estimate of $0.87 by 32.18 percent. This is a 33.72 percent increase over earnings of $0.86 per share from the same period last year. The company reported quarterly sales of $2.59 billion which beat the analyst consensus estimate of $2.53 billion by 2.53 percent. This is a 4.22 percent increase over sales of $2.49 billion the same period last year.
BBY +9% on strong sales reports. Another beneficiary of people stuck at home. They go online to Best Buy and order new TVs, computers, and other electronics. Up the stock goes to new record highs.
Best Buy shares are trading higher after the company reported on Tuesday sales are up roughly 15% compared to last year since stores reopened. The company also said that through July 18th, online sales growth was roughly 185% compared to the prior year.
Home builders having another good day as the Homebuilder confidence index returned to pre-pandemic levels. I'm looking forward to Q2 earnings and guidance of trends in particular. 30 year fixed mortgages are now below 3% (2.98)
US Homebuilder Sentiment Returns to Pre-Pandemic Levels
The NAHB housing market index in the US climbed 14 points from the previous month to 72 in July 2020, easily beating market expectations of 60, as sentiment rebounded following the easing of coronavirus-related restrictions. The current single-family sub-index rose to 79 from 63 in June and the one for prospective buyers went up to 58 from 43. Additionally, the gauge for home sales over the next six months increased to 75 from 68
TMHC and LGIH More evidence of strong demand for new homes. People are into social distancing and one of the best ways to do it is move out of that city apartment and into a single family home in the suburbs. Plus many people are unwilling to put their used house on the market with covid so for many a new home is their best option. Record low mortgage rates to near 3% for 30 year fixed sure don't hurt either.
It is so sad to watch this city literally being destroyed. The Seattle mayor is unwilling to do anything about antifa activists taking over a 6 block area. The police have abandoned their precinct. The governor claimed he doesn't know anything about it. I feel sorry for anyone who lives or works in the area. It needs to be stopped before this anarchy spreads to other cities.
So maybe Yahoo is no longer willing to pay the AP and others their fees for posting the news on earnings reports?? Seems rather ridiculous for that size of business to do that. Then again, they seem to keep coming up with new ways to lower their usefulness as a source for financial news.
Does anyone know of another alternative where we can get those news reports for a basket of stocks?
Interesting that Carnival is choosing to open up with cruises out of Florida and Texas on August 1. I assume these we will be Caribbean cruises. It will be very hot and muggy down there then and hurricane season is well underway too. People will spend much time indoors in air conditioned rooms breathing recycled air.
I like cruising but I'll sure pass on those.
I definitely think we owe the current rally to the Fed. I heard a commentator yesterday say that the Fed had backed off their QE actions from $350 billion/week to $10 billion/week now. So maybe the market rally will end now that the Fed has backed off.
CCS My favorite home builder came out with record Q1 earnings and a nice beat 80c vs 64c estimate. Sales are also holding up well in April considering the shut down at only 10% below April 2019. Stock is up about 6% in early trading at $22.
3 month range is $9 to $39 so lots of volatility.
First Quarter 2020 Highlights Compared to First Quarter 2019
Adjusted net income increased 45% to a record $26.7 million or $0.80 per diluted share and net income increased 53% to a record $26.1 million or $0.78 per diluted share Home sales revenues increased to a record $572.7 million or 9% Home deliveries grew to a record 1,864 homes or 12% Net new home contracts increased 29% to a Company record 2,388 homes Homes in backlog improved 9% to 2,594 homes Adjusted EBITDA increased 28% to $51.8 million Quarter end total liquidity of $592 million, including cash of $473 million
Rob Francescon, Co-Chief Executive Officer, said, "Our team has taken extraordinary steps and displayed impressive ingenuity to enable Century to build, sell and close homes on a daily basis across our national footprint. Although the full impact of the virus remains uncertain, homebuyer demand has thus far held up better than expected in the second quarter. April net sales are trending to be down less than 10% compared to 2019 with both gross and net sales increasing each sequential week. Although we saw an increase in cancellations in March, they have since declined each week and our April cancellation rate is now consistent with our year to date average. We are very pleased with our ability to successfully adapt to this changing environment by quickly and effectively leveraging our vast array of virtual tools to provide buyers with a seamless digital homebuying, lending and closing experience. Although times of crisis certainly test the strength and capabilities of not only individuals but entire organizations, we could not be more impressed with our team's efforts and have the utmost confidence in our ability to move through this challenging period and grow our business over the long-term."
Market loves that news from Gilead but I heard the trial was only on 19 patients, so it is a very small sample size.
MTH very nice beat and it pretty much mirrors what other home builders, including PHM, TPH, and DHI also reported recently. Nice earnings beats and increase in order backlog yoy but also cautioning that the sales pace had slowed down markedly since mid march. DHI is the nation's largest homebuilder. They reported a nice beat with earnings up 40% yoy and orders were also up 20% yoy.
I've seen a report that new home sales are also starting to see a pickup from lower levels in the current world of corona virus fears. Many people with existing homes for sale have pulled their homes off the market because they don't want strangers going through their homes. Vacant new homes are also easier to show.
Here in Washington state, the governor finally re-opened new home construction with safeguards in place. It had been shut down for a month.
BYD Stock is down now in after-hours and I expect it to be down tomorrow too. The company actually had good Jan and Feb but, still lost money for the Q because of March. And most of March they were still operating, so the losses in the current quarter with everything shut down will be humongous.
Even when they do re-open, it will take a long time for the crowds to return. Another one I am short is Disney. Their theme parks, hotels, cruise ships , hotels, and theaters are all shut down. No sporting events for their ESPN division either. The only part of DIS doing well now is Disney+ with online streaming. But that is a startup and likely losing money too.
Yet investors are hanging onto that one division. It will likely be at least a year before their bread and butter get going again, IMO.
Aren't these PPP loans still up to 70% grants as long as that part is used to pay salaries and wages?
If so, how can a company that is paying wages as an expense compete with a company that suddenly has virtually free labor costs? I see lots of distortions in a free market economy coming out of this. This program is well meaning and probably needed but I see lots of unintended consequences arising from it. Weak companies survive while disadvantaged stronger companies could well fail.
May oil futures just hit negative $40/ barrel.
Crazy times and I think shorting those June futures is a great idea. The oil glut will only get worse.
Michael, I missed the news on the extending reporting deadline for earnings reports. How long is the extension?
Earnings reports will start to come out in a week or so. As we get into earnings season, I think we will see more and more terrible reports which will put a cap on this rally mode.
R59, you asked me about the home builders. I lightened up on some of my positions but am still overweight the sector and I see them roaring back over time. I also think the younger people will find a new interest in buying their own homes rather than living in apartments and blowing all their money on things like exotic vacations. I like the builders with lower debt ratios including MDC, LEN, and MTH. My largest position is still in CCS which is in about the middle of the pack in debt ratios. But they are about the cheapest in terms of PE, PB, and PS ratios. A caveat is that a few areas (including my home state of WA) have put a moratorium on home construction although most states which have stay at home rules are allowing home builders to continue to build providing they maintain spacing by workers.
LGIH this home builder reported very strong closings in March and record closings in Q1. That is probably helping to fuel the rally in the sector along with a booming stock market today.
LGI Homes, Inc. (Nasdaq:LGIH) today announced 795 homes closed in March 2020, up from 566 home closings in March 2019, representing year-over-year growth of 40.5%. In addition, the Company announced record-breaking quarterly home closings of 1,835 during the first quarter of 2020 compared to 1,228 home closings in the first quarter of 2019, a 49.4% increase year-over-year.
LK Ernst and Young were the auditors. I expect they will see some big lawsuits out of this again.
The Chinese steal American investment capital, IP, and jobs.
What do we get back in return?
...corona virus...
I think we're already in hyper drive. That would move it into warp drive.
I wonder if they ever stop to think that government revenues will tank both on the corporate and individual tax revenue side this year too. And then the states and local governments will need trillion+ dollar handouts too.
I'm not sure what to think about the BDC group here. The stimulus plan will allow smaller companies to take out loans. My understanding is as long as they use 75% of it to keep and pay employees, the rest of it can cover overhead and the debt will then be forgiven. If the BDC group can make those loans too, then they should do well. Otherwise, I sure don't see much demand for their loan services compared to the new SBA free money plan.
Wade,I am mostly cash but do have a few shorts as well as holding some longs in place. The 4 stocks I shorted are all on large cap, liquid stocks so I can easily get out of them when I want to. It also is not clear how many benefits they will get in the stimulus package (vs smaller companies with fewer than 500 employees where the programs are clearly laid out).They also are in the hospitality industries, I think it will be quite awhile before people feel comfortable gathering in large groups, even after the rules are lifted. They also all have negative tangible book values and substantial debt.
MAR CHH in the hotel group.
BYD in the casino gaming group.
DIS in the entertainment group (theme parks).
Gilead, I ordered some stuff from Amazon last week and they just got around to shipping it today. It was supposed to be 2 day delivery.
I'm sure volumes are way up and they no doubt have more difficulty sourcing products with much of the supply chain drying up. I expect it will get worse going forward too.
bbotcs, Amazing that in 1981 a book was written by a psychic called "The eyes of Darkness" in which the author predicted that a virus would be developed in a biological lab in Wuhan China that causes severe pneumonia and would spread through the world in 2020. Snopes says it is mostly false but China's only biological warfare lab is in Wuhan. China claims covid 19 likely came from a bat but who knows since China did not allow investigators into there early.
Things that make you go Hmmmmm.
https://www.snopes.com/fact-check/dean-koontz-predicted-coronavirus/
And great rally today that lasted right into the close. Will it be a case of buy the rumor and sell the news on the huge bailouts?
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Home builders I just heard that lenders are not closing any loans while the borrower is off work due to the corona virus. They will not close until they get a statement from the borrower's employer that the borrower is working again and at the same wage or salary as he or she was qualified at.
That is no surprise especially considering the new forbearance rules that were issued last week.
With this, I can see where home builders could be stuck with lots of pre sold homes that they can't close. It all depends on how long this slowdown/shutdown lasts.
NRZ Here's a link to a story from CNBC about how the new forbearance rules are stressing the mortgage servicers. They are requesting assistance from the Fed. I also see the new forbearance rule was issued was issued on 3/20 which is a day or two after the NRZ insiders jumped in and bought stock.
https://www.cnbc.com/2020/03/23/coronavirus-us-potential-wave-of-mortgage-delinquencies-could-bankrupt-payment-system.html
NRZ I saw this comment about NRZ on SA. Does anyone know if this is true. It would certainly help explain the huge price drop in NRZ which continues today:
In a nutshell:
"Last week the regulator for mortgage giants Fannie Mae and Freddie Mac announced a forbearance program for borrowers unable to pay their loans because of the effects of the coronavirus.
The Department of Housing and Urban Development, which includes the FHA loan program, announced the same. That is a huge relief for borrowers, who can now delay payments without penalty. Unfortunately there’s a hitch.
The mortgage servicers, the companies that collect monthly payments, are required to pass those payments on to the investors who own those loans in mortgage-backed securities even if the borrowers don’t pay. Servicers also have to pay insurers and tax authorities.
Under normal circumstances, servicers have the cash reserves to do this if just a few borrowers don’t pay, but the industry is now looking at a potentially unprecedented wave of missed mortgage payments."
23 Mar 2020, 06:57 PM
R59, Home builders have seen huge drops for sure! That the drop is so much larger than the market averages is puzzling to me. I know that we are heading into a recession and being a cyclical industry, they should fall. But usually recessions are caused by Fed tightening and higher interest rates. That is not the case this time. Mortgage rates are at or near record lows
Also, with all this fear about the corona virus, I would think that people would prefer to live in a house with some separation between them and their neighbors rather than live in an apartment with numerous community areas. There could literally be someone sick with corona virus in the next door apartment literally a few inches away.
The CEO of Hovanian was on FBN yesterday. He said he was surprised that sales of new homes in their developments have continued to be so strong the last couple of weeks.So the buyers are still out there. I think that there is a fear that the industry could be shut down by the government. From what I have seen around here in Washington state,, building departments remain open but building permit applications and inspection requests are all being done online. Aso, in new home construction, there are typically only one or at most a few workers in there at a time. Social distance is maintained.
In short, I think the builders are way oversold and will come back with a vengeance when the spread of the corona virus finally slows down. LEN announces earnings tomorrow morning. That should provide some guidance on where sales are now.
Btw, WLH, the only stock on your list that is not a big loser was bought out by TMHC a couple months ago and is no longer trading.
LUV It could well be a positive for them that they have all those grounded Max planes. Demand is dropping fast due to fears over the coronavirus anyway and I believe that Boeing is reimbursing them for those grounded planes too.
SAVE and DAL were my favorites but I am avoiding the entire sector until we know more about how corona virus fears are affecting air travel and how long it will last.
southacresdave, That's a very scary scenario for the corona virus. Where did you see that 80% of the people who get it have no symptoms? It appears that China is reporting fewer new cases now. I wouldn't expect that under your scenario. Of course, I don't trust them either and maybe they are imply running out of testing kits for the virus.
At any rate, the corona virus sure has the market scared right now. What a difference a few days makes.
Less than 500 points to go on the Dow to mark a 10% correction from its high. I doubt it will stop there with more bad corona news coming out everyday.
Summer of 2016 was the previous low for the 10 year interest rate and we are pretty much there now. 30 year is at record lows.
CCS This home builder posted a strong beat in earnings and revs for Q4.
Century Communities (NYSE:CCS): Q4 Non-GAAP EPS of $1.50 beats by $0.23; GAAP EPS of $1.63 beats by $0.37.
Revenue of $792.54M (+21.6% Y/Y) beats by $52.54M.
Net new orders were also very strong, up 46% yoy.
Low interest rates and a strong economy are setting up some great numbers in this sector.
NRZ Funny you mentioned this one right after I decided to unload my shares.
The SP is nearing 17 and back above BV which is around where have done those capital raises in the past. The SP always drops when they do so.
Also earnings come out next week so there's more risk there too.
Sure enjoyed all those big fat dividends over the years though.
DHI This large home builder is up nearly3% today after a big beat. EPS came in at $1.16 vs 92c est. Revs also beat and guidance was bumped up too.
Other home builders are mostly mixed. Interest rates are taking a big dive today which should also help affordability for home buyers although December new home sales were just announced and were a little lower than expected. I continue to like the group here.
DIS down because because attendance at their theme parks will drop if people become concerned about the coronavirus. NFLX up because that is all about staying home and watching tv. I have sold all my travel related stocks.
I see more downside than upside short term in the market as this virus spreads. Bought some QID this morning. Here's an article on the virus in China:
https://www.theglobeandmail.com/world/article-this-time-im-scared-sars-virologist-warns-wuhan-virus-far-worse/#comments
BCEI It's really strange the way analyst' estimates bounce around so much for this one. According to TdAm historical avg. analyst estimates for BCEI:
Going into 2017,the average estimate for 2020 was a mere $1.28. In spring 2017, it then dropped to an estimated loss of 92c for 2020.
By year end 2017, it was back up to 64c est. eps.
By spring of 2018, it had shot as high as $8.04 and ended the year at $5.86
In 2019 the average est for 2020 ranged from $4.57 to $7.90.
Current 2020 eps est is $5.62.
I recognize oil prices have moved up ad down over the last 3 years but they haven't been that volatile.
Maybe BCEI anal-ysts need some prozac.
Actually, the law passed to tax a portion of the Social Security income for higher incomes was based on recommendations of an advisory council that was formed in 1979 on how best to fund the social security system so it did not run out of money. In 1979, Jimmy Carter was President.
The law to tax a portion of Social Security benefits was started in the House. At that time (1983-1984), the House was strongly controlled by Democrats 269-166.
So let's not just blame Reagan for that. Democrats actually had more of a hand in it than Republicans did.
https://www.ssa.gov/history/taxationofbenefits.html
Interest rates and builders: R59, true but the 30 year T-note was parked in the 3% range in the Jan to May period. At 2.3% today, it remains well below that. I think that reduced concerns about our economy balances out against the small rise in rates recently.
https://www.cnbc.com/quotes/?symbol=US30Y