On Friday, all developers closed in red, some experienced a more significant drop than others. DHI and LEN have already fallen below the previous month's high, so they would be my best short candidates.
People are not going to be buying houses with mortgage rates through the roof. Multiple researches say the publish believes it is a bad time to buy a house.
I'm not sure. It does seem like the stock may start to turn but it seems pretty risky at this point to short it.
I am thinking about things such as... almost 40% of homes are purchased with cash and some mortgage companies bought billions of dollars in loans at lower rates before the rates went up and they are working through that inventory. But I suspect they have worked through it at this point. While everyone knows there will be a slowdown after that massive post-covid run, it hasn't been a massive drop in numbers. You can pull the numbers online and while you see the numbers drop, they are not by much. Is it enough to short the stock?
I see DHI's 2022 3-months revenues ending in March 31 at 7.999B and in 2023 it is 7.972.9B. If I did my math right, that was a drop of 3%. Their mortgage side dropped 2.8%. 2021 was 6.4469B and 2020 was 4.5B. While those as massive jumps each year the same as just about every builder saw during the pandemic, DHI is still nearly 40% higher than in 2020 and 20% higher than 2021. That seems pretty impressive to me. 20% per year increase in revenue for the past 3 years? A small 3% drop this year is interesting but expected after such massive increases during the pandemic. I can't imagine after the massive run during the pandemic that companies will be able to maintain that level going forward. But I don't see how that is a negative or why it would not be expected.
From what I can find, DHI has about 500M lots and 50K homes in inventory. So no issues with land or home inventory.
@jrothlander, I expect all of the markets to turn at some point. It didn't happen now, but I was still able to close in profit and will short this or Streaming Studios (due to writers strike) again when the technicals line up.
I am thinking about things such as... almost 40% of homes are purchased with cash and some mortgage companies bought billions of dollars in loans at lower rates before the rates went up and they are working through that inventory. But I suspect they have worked through it at this point. While everyone knows there will be a slowdown after that massive post-covid run, it hasn't been a massive drop in numbers. You can pull the numbers online and while you see the numbers drop, they are not by much. Is it enough to short the stock?
I see DHI's 2022 3-months revenues ending in March 31 at 7.999B and in 2023 it is 7.972.9B. If I did my math right, that was a drop of 3%. Their mortgage side dropped 2.8%. 2021 was 6.4469B and 2020 was 4.5B. While those as massive jumps each year the same as just about every builder saw during the pandemic, DHI is still nearly 40% higher than in 2020 and 20% higher than 2021. That seems pretty impressive to me. 20% per year increase in revenue for the past 3 years? A small 3% drop this year is interesting but expected after such massive increases during the pandemic. I can't imagine after the massive run during the pandemic that companies will be able to maintain that level going forward. But I don't see how that is a negative or why it would not be expected.
From what I can find, DHI has about 500M lots and 50K homes in inventory. So no issues with land or home inventory.
businesswire.com/news/home/20230420005141/en/D.R.-Horton-Inc.-America’s-Builder-Reports-Fiscal-2023-Second-Quarter-Earnings-and-Declares-Quarterly-Dividend-of-0.25-Per-Share
investor.drhorton.com/news-and-events/press-releases/2021/04-22-2021-113041406