Today’s recommendation is a growth-and-value buy from the recovering housing sector.
Try to buy on a pullback of a couple points.
Meritage Homes Corp. (MTH)
from AlphaProfit Sector Investor
Meritage Homes shares are a housing play. In the third quarter, Meritage’s EPS rose over
400% as home prices increased 22% and gross margin widened to the highest in seven years. Order value grew 29% while backlog value gained 65%. Catering to move-up buyers, the homebuilder stands to benefit from growth in Sunbelt states. It has entered the Nashville market via acquisition and raised its 2013 EPS forecast to the $2.95- $3.05 range. Meritage shares suit risk-tolerant value investors. They trade at 10.8X-forward EPS versus prospects for 30% EPS growth in 2014.
Buy Below $39.00. Sell Above $46.50. Stop Loss: $19.90. Risk Rating: Above Average.
Sam Subramanian, PhD, AlphaProfit Sector Investors’ Newsletter, www.alphaprofit.com,
281-565-6963, November 2013