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Stockchase Opinions

The Panic-Proof Portfolio (Stockchase Research)D R Horton Inc.DHIPAST TOP PICKJun 03, 2021

(A Top Pick Jan 12/21, Up 32.4%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with DHI has triggered its stop at $90. We are recommending covering the balance of the position at this time. Combined with the previous recommendation to cover 50%, this will result in a net investment gain just over 30%.
$90.81

Stock price when the opinion was issued

$156.43

As of Jun 18, 2026. Market Open.

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BUY

Sometimes momentum works. Balance sheet is strong, home inventories are weak, and fundamentals are strong overall. Add to this cheaper capital/lower rates. The outlook looks good.

DON'T BUY

He's long in the homebuilders which are declining now. September earnings were okay, but shares were weak. These stocks peaked last spring, and he can't see a return to that as long as interest rates remain high.

WEAK BUY

The homebuilders had seen fundamental strength peak in the spring selling season. Doesn't mean there will be a sharp fall for the homebuilders, but are moderating gains (at least in fundamentals, not share price). They still benefit from holding a tight inventory of homes in the US, which will benefit them long term. They peaked earlier, true. He execpts a modest share price recovery.

COMMENT
Downgraded today

He bought this for its strong fundamentals, but momentum is clearly waning. He will review his holding in April.

BUY
Trades at 9x earnings. Have been paying down debt. Housing stocks have bottomed, and housing looks good this year and in 2024. It's a blue chip in housing, despite its higher beta. Last year, you had to be defensive, but you need to be more offensive this year.
DON'T BUY
It reports Thursday. He's very worried about a slowdown in the homebuilding business. Listen closely to the quarterly call. Home deals are down because of soaring mortgage rates.
WEAK BUY
When the market turns, buying US homebuilders is like catching a falling knife. The risk/reward looks in your favour. Housing shortage in the US. Many of them have great business models. Likes the business model of DHI. But you're fighting the macro of mortgage rates at 10 to 15-year highs. Not a great setup from a sentiment perspective. As long as builders can sell homes, and they continue to be affordable, they have great earnings power.
HOLD
The sell-off has been painful, but he likes the stock. Unfortunately, this stock is tethered to wider negative market conditions. He's holding on; he bought it so cheaply and doesn't see a share collapse.
BUY
He likes the homebuilder correction; DHI is down 16% from its YTD highs to 7.5x forward earnings. Time to buy.
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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

PAST TOP PICK
(A Top Pick Jan 12/21, Up 38.2%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with DHI is progressing well. We are now recommending to trail up the stop (from $75) to $90. If triggered, this would all but insure a total investment return over 30%, including the previous recommendation to cover 50% of the position.
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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

PAST TOP PICK
(A Top Pick Jan 12/21, Up 29.9%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with DHI as achieved its $89 objective. To be disciplined, we recommend covering 50% of the position and trailing up the stop (from $59) to $75. This would all but guarantee a return on investment of 19%.
BUY
It's a good entry point for the long-term. We're in the supercycle for housing and DR is the biggest US homebuilder and covers. Earnings growth is really strong. He likes to trade this, . He's bullish US housing and likes DR's positioning here.
BUY
He still likes it. DHI is a spec builder--they'll have a lot more supply despite concerns over lumber prices, rising wages and especially higher interest rates. Every housing recovery happens when rates rise. Play the names that already have the housing supply on the market. Stick with this.
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Curated by Michael O'Reilly since 2020.
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TOP PICK
Stockchase Research Editor: Michael O'Reilly RBC recently upgraded home builder DHI based on current trends in the housing market and its affordable regional focus (largely in Texas) is well positioned. It trades at only 10.5x earnings, compared to 32x for the construction space. With a PEG ratio of 0.72, it is good value based on EPS growth expected to be over 13% next year, following a 49% increase this year. It pays a small dividend backed by a payout ratio of only 10%. We would buy this with a stop-loss at $59, looking to achieve $89 -- over 30% upside potential. Yield 1.18% (Analysts’ price target is $89.21)