MDC Holdings, Inc. (NYSE:MDC)

I believe housing has hit bottom and will be going up.

Long term winner. Check back in 2013

A builder with mondo cash on the books paying a $1 a share annual dividend is likey like. When the bubble was in effect no one could imagine a collapse. Hind sight of course tells us it HAD to happen. We're currently in an inverse environment. The masses see no hope for depreciated housing assets, yet 2008 was the first year in 50yrs America had less than 100 housing starts (we're now in yr 4 of this phenomena and the US population continues to grow). When we start building again building stocks will go up. In the meantime, in real life (and here and CAPS for the hell of it) i'll have me some MDC, and in fer real life I'll gladly accept that dividend. Woot!

looking for housing to start to recover in 2012, building stocks should recover sooner

Fundamentally weak and the outlook is just as bad.

The population will continue to grow every year for decades to come - even ignoring demographic shifts we will need more new home construction pretty soon and for the forseeable future. Will MDC survive until that point? With $500m in cash, and losses under control, that seems a fairly safe bet. It's also a safe bet that other players will not, which will work in MDC's favor when the rebound starts.

Blackeagle7 haiku

Fell too hard and fast-

this builder is here to last

dividend ain't bad!

Sitting on a ton of cheap property with a super lean cost structure. Profits will rocket when the market for new homes recovers. Enough cash to weather the downturn. Bad quarter provided a good entry point.

Stealing from our resident builder expert floridabuilder2.

Looks like a shot.

Long builders

Sept. 2010
some selected home builders

will mr. floridabuiler2 aka chimpcontest be right on his call?
time will tell

tickers for today: MDC,MHO,SPF,LEN,BHS

Looks like one of the better of the HB bunch.

At $26.36/share on 8-25-2010, MDC's M.C.= 1.24B; P/E = 17.3; P/B = 1.2; P/E*P/B = 20.76 (VALUE!); DIV = 3.80%; Current: 6.60; LT Debt/Eq.: 1.20; 2 stars in CAPS. 10 year range: $11.30 - $89.00. My mentor started MDC on 12/29/2008 @ $26.94/share. I'm increasing my start to @24.25 from the previous $21.80.

Yes Fools, you are seeing that correctly, another green thumb on a craptastic home builder stock. Good golly I must have gone mad...

Basically every RE statistic out there is signaling that another round of butt kicking is coming the way of home builders. The tax credit has expired (how did that work out for ya Government?), unemployment is high (and rising?), foreclosures are rising again, 50% of folks who were in Obama's miracle mortgage program have left/been booted, basically RE is a four letter word again.

Yes, times are tough indeed for home builder stocks.

However, I firmly believe now is precisely the time to start nibbling on a few shares here and there of your favorite home builder stocks, for instance the gem that is MDC.

1) Buying sectors that are absolutely hated usually works out well in the end, we are close to reaching those levels of hatred necessary.

2) MDC has a technical resistance in the $27/share level which we are quickly approaching and another solid support at ~$23/share.

3) Most importantly, times are tough for RE right now but that doesn't mean that things will always be this way. With the recent sell off, MDC (etc.) have already priced in crappy revenues/overall RE outlook for the next several years. So by buying MDC I am not advocating that things are all sunshine and lollipops and the RE market is going to magically rebound. No. Instead I am betting that even if the RE market takes years, literally years, to begin healing itself we have put in somewhat of a floor here in regards to stocks and RE in general. Basically, I don't see things in the RE market turning up swiftly, but nor do I see them falling further off a cliff. MDC has already priced in a pretty remarkably ugly forecast. It also should be noted, the most important thing for builders is the number of houses being built, not necessarily the price for which they get sold. Thus, we don't need to return to ridiculously high average price to income ratios like we had in 2003-2006 area, we simply need more housing starts.

4) MDC has loads of cash and arguably some of the best lands positions out there. See Floridabuilder (http://caps.fool.com/player/floridabuilder2.aspx) to understand the importance of land etc. This all points to the fact that MDC has essentially zero (0!) chance of rolling over and going bankrupt. You just need to ride out the storm.

5) Oh, and did I mention they pay out $1 per share on a yearly basis which gives us a dividend yield of ~3.8%. Furthermore, they have steadily been paying this amount out for the past 5 years (including the worst housing/stock market crash since the Great Depression), so ya it's pretty safe.

All this adds up to a solid risk/reward factor in my favor I believe. This won't be quick and it won't be a popular pick but enjoy the ~3.8% yield while you wait 5-7+ years for the housing market to bounce back.

bridgeboy

Part of the XHB

Over five years, housing should come back at least to some extent. Should be an outperform

Wow. Hadn't even thought about homebuilders until I read FloridaBuilder's interview. But everyone's right about this one -- strong cash position, price-to-free cash flow ratio well under 10, with 10% long term growth projected. Why this is a two-star stock... I cannot fathom.