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($$$MR. MARKET$$$ is a proprietary investor and does not provide individual financial advice. The stocks mentioned on this forum do not represent individual buy or sell recommendations and should not be viewed as such. Individual investors should consider speaking with a professional investment adviser before making any investment decisions.)
These days, it seems like many young people dream about finding a home. They get married. They want to have kids. But they can’t find a home that works for them. Life could be a dream, but the harsh reality is that there are more people who want homes than there are homes to buy right now. Well, the dream is becoming a reality as homebuilders are responding to this market imbalance. Yesterday I bought stock in Dream Finders Homes (DFH) at 42.32. I will sell it in 4 – 6 weeks at 48.87. Here’s why I love DFH:
Look at this amazing chart. This stock is up 230% in the last 52 weeks and yet its PE sits at an incredible value of 15.6. But that’s not all.
Dream Finders Homes, Inc. engages in the business of designing, building, and selling homes in high-growth markets using asset-light lot acquisition strategy. It operates through the following segments: Southeast, Mid-Atlantic, Midwest, and Financial Services. The Southeast segment focuses on homebuilding operations in Jacksonville, Orlando, and Tampa, Florida, Savannah, Georgia, Hilton Head and Bluffton, South Carolina, and Active Adult and Custom Homes homebuilding operations in northeast Florida. The Mid-Atlantic segment includes North Carolina homebuilding operations in Charlotte, Fayetteville, Raleigh, Wilmington, and the Triad and DC Metro. The Midwest segment is involved in Texas homebuilding operations in Austin, Dallas, Houston, and San Antonio, and Colorado homebuilding operations in Denver.
Now that the inflation hysteria is subsiding, low interest rates are on the horizon making homebuilder stocks even more attractive. The homebuilding sector continues to show promising signs, and it’s no secret that $$$MR. MARKET$$$ has been feasting on these investments. During the pandemic, investors saw a balloon in home prices across the country. This was primarily driven by fiscal stimulus and ultra low interest rates. Due to the supply/demand imbalance, the United States is facing a shortage in available homes of up to 3 million units. Smart homebuilders are now taking advantage of this deficiency. With a limited supply of existing homes, the anticipated slight decrease in mortgage rates is likely to stimulate housing demand, laying the groundwork for builders to perceive improved market conditions in the months ahead. The National Association of Home Builders is predicting a roughly 5% uptick in single-family starts in 2024, as financial conditions improve alongside favorable inflation data in the coming months. It’s no wonder that Home Builders industry has outperformed the S&P 500 Index in the past year. The industry has gained 59.4% compared with the S&P 500’s rise of 13.4%.
Why keep buying homebuilders?
Low mortgage rates: Mortgage interest rates have risen from record lows, but they are still low by historical standards. Rising home ownership demand: As millennials get older, family creation will be on the rise, along with the demand for home ownership. Any federal government support to reduce the burden of student loans should increase housing demand by making it easier for younger buyers to afford their own homes. Work from home? Stay at home. Many employees are likely to continue working at least partially from home. With more time spent at home, the demand for home ownership is likely to increase.
Dreamfinders has been one of the leaders within this high flying industry. It sports a land-light operating model and operates in high-growth markets. The land-light strategy, is where they purchase options to buy land instead of buying it directly. DFH provides affordable homes to entry-level, first and second-time move-up homebuyers. DFH has consistently achieved strong earnings outcomes, evidence that it is executing its growth strategy. The emphasis remains on efficiently managing construction timelines and enhancing inventory turnover. Dream Finders Homes focuses its homebuilding in metropolitan areas with exceptionally fast population growth. Dream Finders Homes markets have seen their population grow by an average of 5.0%, almost double the national average growth rate of 2.6%
Dream Finders Homes' growth has been very consistent, annual revenue has increased every year since 2013. How do they do it? Simple, they sell more houses. DFH has consistently been selling more homes from year to year. Recently, DFH reported impressive results in fourth-quarter 2023, wherein earnings and revenues beat the ANAL-ysts estimates (again). Dream Finders reported adjusted earnings per share (EPS) of $1.00, which topped the consensus estimate of 67 cents by 49.3%. Total revenues of $1.138 billion also beat the consensus mark of $835.1 million by 36.3% and grew 3.6% on a year-over-year basis. Average sales price of homes closed increased 9% to $520,940 from $479,554. With this, the company’s earnings and revenues surpassed the consensus mark in each of the four consecutive quarters. The uptrend in the quarter’s result was attributable to increased average sales price, improved cycle times and favorable product mix. Looking forward to 2024, the company is optimistic.
Here’s what the boss, Patrick Zalupski, Dream Finders Homes Chairman and CEO, had to say:
"While we are excited about our results from the quarter and 2023 overall, in true DFH fashion, we are focused on the future and continuing to grow our earnings. We have already taken a nice step forward with our recently announced acquisition of Crescent Homes, based in Charleston, South Carolina with additional operations in Greenville, South Carolina and Nashville, Tennessee. This acquisition added three new markets, increasing our footprint to an aggregate of 20 markets, and should provide meaningful future closing and earnings volume.”
What else is there to do except to keep printing money buying these homebuilding stocks. Let’s GOOOOOOO!!!
www.mrmarketishuge.com
These days, it seems like many young people dream about finding a home. They get married. They want to have kids. But they can’t find a home that works for them. Life could be a dream, but the harsh reality is that there are more people who want homes than there are homes to buy right now. Well, the dream is becoming a reality as homebuilders are responding to this market imbalance. Yesterday I bought stock in Dream Finders Homes (DFH) at 42.32. I will sell it in 4 – 6 weeks at 48.87. Here’s why I love DFH:
Look at this amazing chart. This stock is up 230% in the last 52 weeks and yet its PE sits at an incredible value of 15.6. But that’s not all.
Dream Finders Homes, Inc. engages in the business of designing, building, and selling homes in high-growth markets using asset-light lot acquisition strategy. It operates through the following segments: Southeast, Mid-Atlantic, Midwest, and Financial Services. The Southeast segment focuses on homebuilding operations in Jacksonville, Orlando, and Tampa, Florida, Savannah, Georgia, Hilton Head and Bluffton, South Carolina, and Active Adult and Custom Homes homebuilding operations in northeast Florida. The Mid-Atlantic segment includes North Carolina homebuilding operations in Charlotte, Fayetteville, Raleigh, Wilmington, and the Triad and DC Metro. The Midwest segment is involved in Texas homebuilding operations in Austin, Dallas, Houston, and San Antonio, and Colorado homebuilding operations in Denver.
Now that the inflation hysteria is subsiding, low interest rates are on the horizon making homebuilder stocks even more attractive. The homebuilding sector continues to show promising signs, and it’s no secret that $$$MR. MARKET$$$ has been feasting on these investments. During the pandemic, investors saw a balloon in home prices across the country. This was primarily driven by fiscal stimulus and ultra low interest rates. Due to the supply/demand imbalance, the United States is facing a shortage in available homes of up to 3 million units. Smart homebuilders are now taking advantage of this deficiency. With a limited supply of existing homes, the anticipated slight decrease in mortgage rates is likely to stimulate housing demand, laying the groundwork for builders to perceive improved market conditions in the months ahead. The National Association of Home Builders is predicting a roughly 5% uptick in single-family starts in 2024, as financial conditions improve alongside favorable inflation data in the coming months. It’s no wonder that Home Builders industry has outperformed the S&P 500 Index in the past year. The industry has gained 59.4% compared with the S&P 500’s rise of 13.4%.
Why keep buying homebuilders?
Low mortgage rates: Mortgage interest rates have risen from record lows, but they are still low by historical standards. Rising home ownership demand: As millennials get older, family creation will be on the rise, along with the demand for home ownership. Any federal government support to reduce the burden of student loans should increase housing demand by making it easier for younger buyers to afford their own homes. Work from home? Stay at home. Many employees are likely to continue working at least partially from home. With more time spent at home, the demand for home ownership is likely to increase.
Dreamfinders has been one of the leaders within this high flying industry. It sports a land-light operating model and operates in high-growth markets. The land-light strategy, is where they purchase options to buy land instead of buying it directly. DFH provides affordable homes to entry-level, first and second-time move-up homebuyers. DFH has consistently achieved strong earnings outcomes, evidence that it is executing its growth strategy. The emphasis remains on efficiently managing construction timelines and enhancing inventory turnover. Dream Finders Homes focuses its homebuilding in metropolitan areas with exceptionally fast population growth. Dream Finders Homes markets have seen their population grow by an average of 5.0%, almost double the national average growth rate of 2.6%
Dream Finders Homes' growth has been very consistent, annual revenue has increased every year since 2013. How do they do it? Simple, they sell more houses. DFH has consistently been selling more homes from year to year. Recently, DFH reported impressive results in fourth-quarter 2023, wherein earnings and revenues beat the ANAL-ysts estimates (again). Dream Finders reported adjusted earnings per share (EPS) of $1.00, which topped the consensus estimate of 67 cents by 49.3%. Total revenues of $1.138 billion also beat the consensus mark of $835.1 million by 36.3% and grew 3.6% on a year-over-year basis. Average sales price of homes closed increased 9% to $520,940 from $479,554. With this, the company’s earnings and revenues surpassed the consensus mark in each of the four consecutive quarters. The uptrend in the quarter’s result was attributable to increased average sales price, improved cycle times and favorable product mix. Looking forward to 2024, the company is optimistic.
Here’s what the boss, Patrick Zalupski, Dream Finders Homes Chairman and CEO, had to say:
"While we are excited about our results from the quarter and 2023 overall, in true DFH fashion, we are focused on the future and continuing to grow our earnings. We have already taken a nice step forward with our recently announced acquisition of Crescent Homes, based in Charleston, South Carolina with additional operations in Greenville, South Carolina and Nashville, Tennessee. This acquisition added three new markets, increasing our footprint to an aggregate of 20 markets, and should provide meaningful future closing and earnings volume.”
What else is there to do except to keep printing money buying these homebuilding stocks. Let’s GOOOOOOO!!!
www.mrmarketishuge.com
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