Sell: D.R. Horton, Inc. (DHI)
From Dow Theory Forecasts
Updated from Wall Street’s Best Investments 802, February 21, 2018
D.R. Horton, Inc. (DHI) said revenue from home sales grew 9% to $4.4 billion in the September quarter. While not a direct comparison to the consensus revenue estimate of $4.69 billion, D.R. Horton’s update suggests a likely shortfall. Volumes rose 11% for both homes closed and net sales orders. The backlog increased 8% to $4.03 billion.
We aren’t waiting around for the company’s full results, due Nov. 8. The stock is being removed from the Buy and Long-Term Buy Lists.
Unlike most homebuilders, D.R. Horton devotes much of its focus to the lower end of the market, a highly attractive space as millennials form households. But the stock’s biggest risks
appear to be materializing.
D.R. Horton is combating higher costs for materials and labor at the same time rising interest rates threaten to sideline first-time home buyers.
Richard Moroney, CFA, Dow Theory Forecasts, www.dowtheory.com, 800-233-5922, October 15, 2018