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Housing

Everything our editor has picked under this sector, best first.

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@ActAccordingly 1 click

PAA Research on X

The trading action in $LEN should be pretty interesting following a disappointing print and underwhelming guidance (albeit not surprising). The stock trades at tangible book value with a 2.5% dividend yield (that used to mean something) and they look set to buyback 5-7% of the shares outstanding annually. They've moved their entire pricing and gross margin model down to meet the market so they can move volumes. They're moving units in Arkansas at $230,000. There's definitely a market at that price point. There's some controversy about their land bank accounting practices from the work of @hntrbrkmedia, but you still have a biz that's not impairing book and generating profits. Insiders own a fair amount, Berkshire bought last quarter. Is there enough bad news here? Is it finally washed out? https://t.co/j7W0oY1pY5
@AsifSuria

Asif Suria on X

Given what is happening with most housing related stocks including Floor & Decor $FND and $QXO, I would have expected to see more insider buying at these companies but that is yet to materialize. We did see the home builder D.R. Horton $DHI increase its stock buyback authorization by an additional $5 billion yesterday (nearly 13% of market cap). The last insider purchase at the company was in 2014. With mortgage rates going up, it might be too early to get into this industry but I am starting to get interested.
@BrokenMoats

Broken Moats on X

Rate sensitive / consumer spending names starting to really take on water with rates and oil up....Game theory probably suggests the administration is likely to pull more tricks out of their sleeves leading into the midterms to try and increase affability and control rates (at least for talking points). --- Already witnessing a vert activist treasury secretary that (at least so far) did not succeed with his 6B buyback (but next month when the TGA refunding comes out I imagine he will use a much bigger mechanism to manipulate rates through the election) --- I also think the fed is much less likely to raise rates then the market is pricing (the committee members even beyond Warsh do not have the will to raise (Powell, Williams, etc) --- I also believe they will announce some sort of housing plan to have as a talking point for the closing stretch of these raises (down payment assistance, rate support, mass housing supply push on federal lands, etc). Does not matter if they never follow through, but something to come in mind as we play out the coming months I think some select housing plays that are blown out on weak starts, high rates, poor affordability, high commodity prices, etc. could be putting in attractive setups to go the other way for the coming months to election ($QXO, $LOW, $BLDR, $SSD)

QXO Inc.

QXO is building a North American construction-products distributor through Beacon, Kodiak and TopBuild, targeting $18.1 billion of combined…

QXO $11B
SixSigmaCapital: Navigating the Financial Markets
@BrokenMoats 1 click

Broken Moats on X

The bigger issue I think is if changes in commission structures ongoing in real estate changes Zillows position in the industry and if they need to overhaul their model on the housing side? ZG running straight into https://t.co/xkzar3nuEl with success to increase supply and they'll both likely end up sharing that market (more a negative against csgp as they have the larger share in the rental space currently) but I think they end up shrinking that pie with their competitive attacks against each other. The compass and regional MLS provider lawsuit on exclusives, supply I think is the bigger case hanging over $ZG currently because thats one of the few threats to their dominance in mindhare in shopping/looking at homes online and their ad revenues there