D.R. Horton, Inc. (NYSE:DHI)

Undervalued since the height of subprime crisis.

Check out this article to see why I am bullish on D.R. Horton:

http://www.fool.com/investing/general/2012/01/13/earnings-will-drive-this-industry-higher.aspx?source=iaasitlnk0000003

Homebuilders are getting "less bad" but still have a few years of rough road ahead. We are still at least 2-3 years out from recovery mode.

everyone is moving back in with mom and dad.

No market for new houses. Zero. Wait till at least 2 years.

These guys build the same old cheap crummy small-lot HOA future-foreclosures that we already have plenty of.

No builder should trade above BV

Stability in the sub-prime housing is on the cusp, it just takes the right legislation and availability of money to lend. Whatever the interest rate is doing doesn't matter in a 2-4 year time frame.

following the leader

Homebuilders have been decimated since the bursting of the credit and real estate bubbles. But take a closer look --- DHI has a strong balance sheet, is cash flow positive, and can modify the scale of its operations to match new home construction demand (it's not a financier of buyers, outsources most of its construction personnel, doesn't hold warehouses filled with materials). One of it's major exposures is to the acquisition cost of land.

I think that it's time to take a good look at this stock. Not all homebuilders present a compelling investment thesis, but I think this one has more upside potential than downside risk right now.

Long-term bet that the homebuilders will outperform the S&P over a long period of time (3-10 years).

housing will recover, and DHI will be the winner

While the housing crisis is by no means over, DHI has weathered the storm and remains a (relatively) healthy player in this industry. I expect a couple more years of slow but steady growth, and am happy to reinvest my dividends, buying more shares at reduced prices. When the next housing cycle arrives DHI will be one of the names poised for a breakout.

Good balance sheets, sector is hated currently, demand for housing will outstrip supply in 2-3 years

The housing market has to rebound from the current slump or this economy will not recover.

GS downgrade and the bad news already priced in play into my inner contrarian. DHI appears better prepared to survive this downturn and thrive once housing recovers.

The homebuilding sector is not recovering, it appears that way, these are NON EXISTENT PROFITS!

The only thing I hate more than this company is nothing. Well, no, I think I hate Hovnanian more - fundamentally speaking HOV's debt to asset ratio of close to 100% beats this beast which merely slouches along at 50. But these home builders that have run up so hugely since January have done so mostly due to temporary accounting rules thrown at them by Uncle Barry & Co. Those are going away and what will remain is close to 10% unemployment, an immense market of foreclosed homes, AND potential fallout in the credit markets resulting from the failure of a bunch of non-showering, 20-hours-a-week-working slimy Europeans to pay their bills. In short, one must short. And then short some more. I myself am going to go Mugsy Bogues upside the head of this atrocity of a company. OH! Big bonus! Cramer recommended this a few weeks back. Yet another guarantee of its eventual collapse in value.

fransgeraedts