The surge in residential real estate has been one of the unexpected themes of 2020. Homebuilders have been posting strong results in the process, as millennials increasingly turn to remote work and ditch city centers for suburbs. One such homebuilder, Lennar, reported strong profits in Q4 as activity remained robust and as interest rates continue to anchor to record lows.
The question for investors is, will this housing strength continue? Or has the pandemic-induced wave of new homebuyers run its course, only to give way to softer activity in 2021? A.I.dvisor has some insight, with the analysis below comparing Lennar Corp., PulteGroup, and Toll Brothers.
he homebuilder reported higher profit in the fiscal fourth quarter as demand for homeownership remains elevated due to lower borrowing costs and the pandemic.According to our system of comparison, LEN is a better buy in the short-term than PHM and TOL.
LEN may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In of 33 cases where LEN's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are .
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 54 cases where LEN's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where LEN advanced for three days, in of 321 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 328 cases where LEN Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
The 10-day RSI Indicator for LEN moved out of overbought territory on April 01, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 38 similar instances where the indicator moved out of overbought territory. In of the 38 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Momentum Indicator moved below the 0 level on April 08, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on LEN as a result. In of 84 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for LEN turned negative on April 03, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 47 similar instances when the indicator turned negative. In of the 47 cases the stock turned lower in the days that followed. This puts the odds of success at .
LEN moved below its 50-day moving average on April 15, 2024 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for LEN crossed bearishly below the 50-day moving average on April 18, 2024. This indicates that the trend has shifted lower and could be considered a sell signal. In of 12 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where LEN declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 53, placing this stock better than average.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.753) is normal, around the industry mean (6.594). P/E Ratio (11.784) is within average values for comparable stocks, (94.223). Projected Growth (PEG Ratio) (1.325) is also within normal values, averaging (1.437). Dividend Yield (0.010) settles around the average of (0.043) among similar stocks. P/S Ratio (1.345) is also within normal values, averaging (80.487).
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. LEN’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
a builder of residential buildings and provides residential mortgage, title and closing services
Industry Homebuilding