Top picks 2012: Lennar

After 5 straight profitable quarters, analysts see earnings for this homebuilder leaping next year.

By TheStockAdvisors Dec 27, 2011 4:58PM
Image: Home under construction (© Corbis)This post is one in a series in which more than 50 newsletter advisors share their Top Stock Picks for 2012

By Michael Cintolo, Cabot Market Letter

Throughout market history, three-quarters of all big winners have been growth stocks -- those with big sales and earnings, huge profit margins and a unique and potentially revolutionary new product and service.

But the other quarter of big winners have been turnaround stories, as earnings rocket higher following a tough year or two or three.

Today, I think homebuilding (and other housing-related) stocks are in the midst of a big turnaround, and Lennar (LEN) could ride that wave to big gains in 2012.

The company, of course, has been a terrible performer for five years as the housing bust dragged on.

But, impressively, Lennar has notched five straight profitable quarters despite the horrid conditions, has recently been topping estimates and has cut costs to the bone. Analysts see earnings leaping 59% next year.

We're already seeing some pickup in broad industry statistics like housing starts, which are literally coming off 50-year lows.

That's a key point -- no one (including me) is calling for a new housing boom, but if activity simply moves up to average levels, it would imply a near-doubling in demand!

With all the weak hands out and major signs of accumulation since the stock's October low, I think Lennar should do very well in the year ahead.

Steven Halpern's TheStockAdvisors.com offers a free daily review of the favorite stock ideas of the nation's top financial newsletter advisors.

Tags: LEN
1Comment
Dec 28, 2011 10:32PM
avatar

Homebuilders in midst of big turnaround!!!

 

Whatever you're smoking I want some.

 

 

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

115
115 rated 1
269
269 rated 2
445
445 rated 3
614
614 rated 4
684
684 rated 5
678
678 rated 6
608
608 rated 7
454
454 rated 8
310
310 rated 9
138
138 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
AAPLAPPLE Inc10
ARCPAMERICAN REALTY CAPITAL PROPERTIES Inc10
ATVIACTIVISION BLIZZARD Inc10
BIDUBAIDU Inc10
BMYBRISTOL-MYERS SQUIBB CO.10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.