Today, we are moving shares of M/I Homes (MHO) from Buy to Sell.
The shares have benefitted from being significantly undervalued at our recommendation date combined with strong earnings and resilient housing demand.
Today, the shares trade at about 1.0x tangible book value, compared to .68x at our recommendation date. Industry conditions remain favorable, but the risk/reward has moved to neutral at best due to the valuation.
The shares have generated an approximately 65% total return, compared to a roughly zero total return for the S&P 500, since our initial recommendation in late April 2022, at 44.28.
Disclosure: The chief analyst personally owns shares of all Cabot Turnaround Letter recommended names, including those mentioned in this note.