M.D.C. Holdings Q4 2019 Earnings – Clinging to Housing Sentiment

Introduction When I wrote about the third quarter earnings for M.D.C. Holdings (MDC), I wondered aloud: “MDC’s next report on orders should deliver a very telling challenge to investor sentiment.” MDC seemed to deliver on orders in its Q4 earnings report, up 49% year-over-year and up 13% for the whole year. Investors were initially excited … Read more

M.D.C. Holdings Earnings Q3 2019: A Sharp Decline in Housing Sentiment

Overall Assessment The stocks of home builders have had a banner year. The failure of the iShares Dow Jones Home Construction ETF (ITB) right at the climactic high of January, 2018 exposed a change in sentiment at an important juncture. So far, M.D.C Holdings (MDC) has suffered one of the most damaging changes in sentiment. MDC … Read more

The Message in Toll Brothers

Toll Brothers (TOL) soared 5.2% to close at a 15-month high.

The Pairs Trade Exactly one month ago, I pointed to a pairs trade using put options in Toll Brothers (TOL) and call options on the iShares Dow Jones Home Construction ETF (ITB). Home builders selling affordable and otherwise lower-priced homes were rapidly gaining favor. Toll Brothers, a builder of luxury, high-end homes, was greatly under-performing … Read more

M.D.C. Holdings Order News Propels Its Stock to An 11-Year High

M.D.C. Holdings (MDC) closed with a 5.2% gain and an 11-year higher after another bullish order update.

M.D.C. Holdings (MDC) delivered another bullish report on its order flow. After the market closed on September 12th, M.D.C. Holdings announced… For the first two months of the 2019 third quarter, net new home orders increased 63% year-over-year to 1,418…The increase was driven by a 40% improvement in the monthly sales absorption rate to 3.75 … Read more

M.D.C. Holdings Smashes Through the Seasonal Top for Home Builders

M.D.C. Holdings (MDC) jumped to a 6-year high on the heels of a major earnings guidance surprise.

I have written plenty this year about the seasonal top in home builders. I even drew up a game plan to trade this pattern in a way to pay for the bullish trade that opens up during the period of seasonal strength. That seasonal top took its first good hit with a positive pre-earnings announcement … Read more