+ Watch MDC
on My Watchlist
The Company's business consists of two primary operations, homebuilding and financial services.
Currently undervalued, plus yield for your wait.
Beaten up over interest rates, bit if rates continue to rise it will bring out the buyers afraid to lose out on historic lows. That's the catalyst, buyers chasing home loan yields that will continue to rise.
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!
Blackeagle7 haikuFell too hard and fast-this builder is here to lastdividend ain't bad!
Looks like a shot.
Sept. 2010some selected home builderswill mr. floridabuiler2 aka chimpcontest be right on his call?time will telltickers for today: MDC,MHO,SPF,LEN,BHS
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.
Part of the XHB
Over five years, housing should come back at least to some extent. Should be an outperform
balance sheet, no debt to roll near term
... because Florida won the BCS Championship... or something like that, I forget...
MDC is in some of the worst bubble markets. However, the builders that are going bankrupt the fastest are in the worst bubble markets. MDC is going to come out of this much stronger and better positioned.Perma green thumb until the next down turn
get ready for the bounce - it's time for builders to start growing again...and the best of the best (like MDC, with a nice clean balance sheet) are in the best shape to pop
As per Benjamin Graham value principles, stock is available at a price which is at a discount to its intrinsic value.
alright hes my new thesis...an interesting one..probably will be wrong but who knows: housing will be down significantly this week due to the federal reserve addressing inflation at the next meeting. The rally on anticipated rate cut is overdue and housing is back for a pullback.
housing sector has to work its way out before things get good....massive foreclosures coming...bottom has not been reached and may be retested before we see a true bottom.
CTX, DHI, KBH, MDC, CTX, DHI, KBH, MDC, MHO, NVR, PHM, SPFMHO, CTX, DHI, KBH, MDC, MHO, NVR, PHM, SPFNVR, PH CTX, DHI, KBH, MDC, MHO, NVR, PHM, SPFM, SPF CTX, DHI, CTX, DHI, KBH, MDC, MHO, NVR, PHM, SPF KBH, MDC, M CTX, DHI, KBH, MDC, MHO, NVR, PHM, SPFHO, NVR, PHM, SPF CTX, DHI, KBH, MDC, CTX, DHI, KBH, MDC, MHO, NVR, PHM, SPFMHO, CTX, DHI, KBH, MDC, MHO, NVR, PHM, SPFNVR, PH CTX, DHI, KBH, MDC, MHO, NVR, PHM, SPFM, SPF CTX, DHI, CTX, DHI, KBH, MDC, MHO, NVR, PHM, SPF KBH, MDC, M CTX, DHI, KBH, MDC, MHO, NVR, PHM, SPFHO, NVR, PHM, SPF all going under !!!!
From my short ideas/valuation screen
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