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Hello, anyone out there? I bought this stock yesterday. The Sept 6 issue of Fortune which ranks it #2 in their list of growing companies called it to my attention. After running through the numbers, I have a hard time finding a downside. Here's a sum-up:
Current year PE=4.5
Year-forward PE=4
5-year annual rate of growth estimate 14%
Share price<Book value!!! (I have not been able to find another share for which this is true).
Sales are 4 x share price.
11 straight years of profits
2 consecutive quarters of beating EPS estimates (+15%, +25%)
Record backlog of orders for new homes
Financials that meet or beat those of other companies in the same industry.
When I compared with LAF, a major industry construction player, ROE and ROA were better for MTH; profitability was comparable (7.7 vs 9.9).
Most shares are owned by insiders (49%) so those running the business have a strong interest in making it work. Insider trading index is positive (they're buying their own stock) indicating confidence in the future.
Conclusion: The risks of investing in this stock – other than those inherent to the business (government regulation of taxes and zoning; climate, general state of the economy, etc…) seem minimal. I don't expect it to fly up and down like a Net stock but it sounds like a safe haven that will bring consistent and solid returns in the years ahead. I expect it to be a low-key yet serious performer that will add a sprinkle of balance to my tech-heavy portfolio. I'm in! -Julie
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