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Turnaround Letter
Out-of-Favor Stocks with Real Value

May 18, 2023

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.

Bruce Kaser has more than 25 years of value investing experience in managing institutional portfolios, mutual funds and private client accounts. He has led two successful investment platform turnarounds, co-founded an investment management firm, and was principal of a $3 billion (AUM) employee-owned investment management company.