D.H. Horton supported by strong earnings

The homebuilder's shares are building extremely bullish momentum.

By TheStockAdvisors May 2, 2013 10:24AM

Home under construction © CorbisBy Leo Fasciocco, Ticker Tape Digest


Home building stocks have been coming in with better than expected profits and many have been pushing higher. D.R. Horton (DHI) recently broke out from a 13-week flat base, which carried the stock to a six-year high. The push higher was triggered by favorable quarterly earnings.


With annual revenue of $4.7 billion, the company builds high-quality, single-family homes designed principally for the entry-level and move-up markets. It also provides mortgage financing and title services.


DHI's long-term chart shows the typical cyclical pattern of the housing stocks. The stock soared from $3 to a peak of $42 in 2005. The stock then made the round trip back to $3 in 2008 due to the bear market.


However, since then DHI's stock has been on the move higher. The stock recently broke out from a 13-week flat base, which carried the stock to a six-year high. Over the past 12-months the stock has appreciated 62% versus 18% for the S&P 500 ($INX) index.


This fiscal year ending in September, analysts are forecasting DHI will show a 36% gain in net to 31 cents a share from 23 cents a year ago. We see good chances for that forecast to be raised.


Going out to fiscal 2014, earnings are projected to climb 31% to $1.02 a share from the anticipated 31 cents for fiscal 2013.


Institutional sponsorship is excellent. The largest fund holder is Fidelity Contrafund with a 5.6% stake. The 4-star rated fund was a recent buyer of 682,966 shares. Also, the 4-star rated T. Rowe price Inst. Large Cap Growth Fund was a recent purchaser of 707,600 shares.


The stock's momentum indicator is extremely bullish. The accumulation -- distribution line has turned up and compliments the price action. We are targeting DHI for a move to $32 off this breakout.


More from TheStockAdvisors.com

Tags: DHI
0Comments

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.

125
125 rated 1
267
267 rated 2
455
455 rated 3
612
612 rated 4
682
682 rated 5
695
695 rated 6
632
632 rated 7
472
472 rated 8
279
279 rated 9
147
147 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
VZVERIZON COMMUNICATIONS9
TAT&T Inc9
CTLCENTURYLINK Inc8
EXCEXELON CORPORATION8
AAPLAPPLE Inc10
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.