Good Monday to all. Hope everyone had a great weekend. As Monday tradition would have it, we are going to look at a weekly position for a stock that I think has potential to move up all week long. Last week, our long term position in Winnebago Industries (WGO) was worth 13% for us. This week we are hoping to find another diamond in the rough. Our only other open position from last week was JBL. We entered at 13.56, and we were looking to exit at 14.10 – 14.37. The stock is in that range this morning, and we are looking to exit today. Additionally, we opened a position in Nordstrom Inc. (JWN) at 38.61 for our Long Term Investment Portfolio on Friday.
Play of the Week: Lennar Corp. (LEN)
Analysis: Residential construction is obviously not one of the most vibrant industries out there, and it is full of lots of risk. One thing is for sure, though, is that residential construction had its best three months since 2007 in the March – May 2010 run (as can be seen on the graph above). The reason for the return to buying new homes and existing homes – the homebuyer tax credit. The credit has worn off, but the results for companies like Lennar, KB Homes (KBH), and other are still to be seen. Some companies have shown how the vibrant January – March helped, such as Hovnanian’s (HOB) 500% profits beat. Lennar Corp.’s (LEN) Q2 2010 runs March – May, and it was a great time for the company. The company will report profits on Wednesday evening, and I am expecting big things. They are projected to report a 0.00 profit per share with top line estimates reaching 0.18 per share.
The first reason I am excited by LEN is that the company may be turning a loss of 0.76 EPS from one year ago into profits this quarter. It would also be a sequential loss to profit for the company. Those two indicators could send this stock skyrocketing. The company has been underestimated in both Q1 2010 and Q4 2009 when the taxbuyer credit has been in full swing,
showing profit beats of 87% and 147%, respectively. The entire sector has had a great start to the year. Lennar’s close competitors, DR Horton (DHI) and Pulte Homes (PHM), both reported their last earnings for January – March and saw earnings beats of…
