{"id":25579,"date":"2015-09-09T17:29:47","date_gmt":"2015-09-10T00:29:47","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=25579"},"modified":"2015-09-09T17:29:47","modified_gmt":"2015-09-10T00:29:47","slug":"buy-the-dip-on-lgi-homes","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2015\/09\/09\/buy-the-dip-on-lgi-homes\/","title":{"rendered":"Buy the Dip on LGI Homes"},"content":{"rendered":"

(This is an excerpt from an article I originally published on Seeking Alpha on November 19, 2014. Click here to read the entire piece<\/a>.)<\/strong><\/p>\n

{snip}<\/p>\n

An analyst asked this timely question during the November 11, 2014 earnings call for LGI Homes (LGIH). The quote comes from the Seeking Alpha transcript<\/a> of that earnings call. Charles Merdian – Chief Financial Officer, Treasurer, and Secretary – gave a very non-committal answer by saying the company feels “…pretty comfortable with where we are at right now” although it is “comfortable” going up to the mid-50s for the gross debt to capital ratio. As it turned out, a massive debt offering was indeed right around the corner. {snip}<\/p>\n


\n
\"A<\/a>
A quick tumble for LGIH<\/figcaption><\/figure>
\nSource: FreeStockCharts.com<\/a><\/strong>
\n<\/center><\/p>\n

LGIH announced that it will use the proceeds<\/a> to repurchase shares from buyers of convertible notes and use the rest for any of a variety of operational purposes: <\/p>\n

{snip}<\/p>\n

These funds are timely because the company is facing a shrinking market for finished lots and is now buying more raw land which it will need to develop to maintain its target of 3-5 years of lot inventory. {snip}<\/p>\n

The opportunity in buying the dip on LGIH comes from what I think is temporary selling pressure related to the convertible. {snip}<\/p>\n

The fundamentals supporting a purchase assume that LGIH can continue its strong growth profile. {snip}<\/p>\n

LGIH expects to close out 2014 on a strong note and will provide 2015 guidance at a later date.<\/p>\n

{snip}<\/p>\n

Be careful out there!<\/p>\n

Full disclosure: long LGIH<\/p>\n

(This is an excerpt from an article I originally published on Seeking Alpha on November 19, 2014. Click here to read the entire piece<\/a>.)<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

(This is an excerpt from an article I originally published on Seeking Alpha on November 19, 2014. Click here to read the entire piece.) {snip} An analyst asked this timely question during the November 11, 2014 earnings call for LGI Homes (LGIH). The quote comes from the Seeking Alpha transcript of that earnings call. Charles … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[220],"tags":[1450,1449],"class_list":["post-25579","post","type-post","status-publish","format-standard","hentry","category-earnings","tag-lgi-homes","tag-lgih"],"yoast_head":"\nBuy the Dip on LGI Homes - ONE-TWENTY TWO: Trading Financial Markets<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/drduru.com\/onetwentytwo\/2015\/09\/09\/buy-the-dip-on-lgi-homes\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Buy the Dip on LGI Homes - ONE-TWENTY TWO: Trading Financial Markets\" \/>\n<meta property=\"og:description\" content=\"(This is an excerpt from an article I originally published on Seeking Alpha on November 19, 2014. 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