Contravisory Investment Management Inc., a financial services provider, recently acquired a new stake in LGI Homes, Inc. (NASDAQ:LGIH) during the second quarter of this year. According to their filing with the Securities and Exchange Commission (SEC), Contravisory acquired 2,279 shares of LGI Homes’ stock, valued at approximately $307,000.
LGI Homes released its quarterly earnings results on August 1st, revealing that it had achieved $2.25 earnings per share (EPS) for the quarter. This exceeded the consensus estimate of $1.90 by an impressive $0.35. The company generated revenue of $645.70 million during this period, compared to analyst estimates of $638.05 million.
Although LGI Homes experienced a decline of 10.7% in its quarterly revenue on a year-over-year basis, it still managed to maintain a net margin of 9.44% and a return on equity of 12.30%. It is important to note that during the same period last year, the company reported significantly higher EPS at $5.20.
Looking ahead, sell-side analysts anticipate that LGI Homes will post 8.14 EPS for the current year on average. This highlights optimism surrounding the company’s future performance.
LGI Homes specializes in designing, constructing, and selling homes across various segments of the market. The company offers entry-level homes under its LGI Homes brand name – both attached and detached – as well as active adult homes for older individuals under its Terrata Homes brand name.
In addition to its core business of home construction and sales, LGI Homes also engages in wholesale activities whereby it builds and sells homes to institutions interested in acquiring single-family rental properties.
This recent acquisition by Contravisory Investment Management Inc., coupled with LGI Homes’ strong financial performance and diversified product offerings within the housing market, bodes well for the company’s future prospects. As of September 19, 2023, LGI Homes remains a highly regarded player in the industry, offering homebuyers a range of options to meet their needs and preferences.
Archer-Daniels-Midland Company
ADM
Strong Buy
Updated on: 19/09/2023
Financial Health
Very Healthy
Debt to equity ratio: Buy
Price to earnings ratio: Strong Buy
Price to book ratio: Strong Buy
DCF: Strong Buy
ROE: Neutral
Institutional Investor Changes Fail to Boost LGI Homes’ Lackluster Performance
Lackluster Performance Amidst Institutional Investor Changes
September 19, 2023
In recent months, several institutional investors and hedge funds have made notable changes to their positions in LGI Homes (NASDAQ:LGIH). However, despite such activities, the company’s performance has been lackluster. Let’s delve deeper into these changes and explore the stock’s current standing.
Among the institutional investors involved was Dark Forest Capital Management LP, which acquired a new position in LGI Homes during the first quarter of this year. The investment was valued at approximately $27,000. Moreover, WealthPLAN Partners LLC also entered the scene during this period with a stake valued at around $32,000. However, it is worth noting that these investments were relatively small in size.
Another player in this arena was Versant Capital Management Inc., which significantly increased its stake in LGI Homes by an astounding 3,111.1% during the first quarter. The company now owns 289 shares of LGIH stock valued at $33,000 after purchasing an additional 280 shares in the last quarter. This sudden surge in investment might raise some eyebrows among market observers.
Adding to the list is Allspring Global Investments Holdings LLC, whose holdings of LGI Homes increased by 20.7% during the first quarter. The firm now possesses 631 shares valued at $72,000 after acquiring an additional 108 shares recently.
Lastly, Tower Research Capital LLC TRC raised its stake in LGI Homes by a whopping 337% during the first quarter, adding an extra dimension to the puzzle. The increase resulted in ownership of 721 shares valued at $82,000 after purchasing an additional 556 shares.
Interestingly enough, when considering all institutional investments combined, it becomes evident that they currently account for a staggering 89.43% of LGIH stock ownership. This perplexing statistic raises questions about what led these investors to take such decisive actions.
Switching gears, let’s turn to LGI Homes’ recent market performance. On Tuesday, the stock opened at $110.73 on NASDAQ. Over the past year, LGIH has experienced price fluctuations, hitting a low of $74.61 and reaching a high of $141.91. These volatile swings seem indicative of an uncertain market sentiment surrounding the company.
From a technical standpoint, LGI Homes’ 50-day simple moving average stands at $127.68, while its 200-day simple moving average hovers around $121.03. Such figures suggest that the stock has yet to find stability and direction in this ever-changing market landscape.
The firm’s financial indicators reveal mixed signals as well. With a current ratio of 8.49, LGIH seems to have enough current assets to cover short-term obligations efficiently. However, its quick ratio of 0.35 raises concerns about the company’s liquidity position.
Furthermore, LGI Homes carries a debt-to-equity ratio of 0.61, indicating that it relies considerably on borrowed funds to finance its operations and investments. This leverage might leave the company vulnerable to economic downturns or interest rate hikes.
LGIH currently boasts a market capitalization of $2.61 billion and maintains a price-to-earnings (PE) ratio of 12.74—a relatively modest valuation compared to other industry players which may signal undervaluation or lackluster growth prospects according to some investors.
In terms of research reports on LGI Homes, Wedbush raised their target price from $89.00 to $97.00 while giving the company a “neutral” rating back in August 2023.
JPMorgan Chase & Co., in contrast, upped their price target on LGIH from $90.00 to $105 and assigned an “underweight” rating for the stock during that same month. BTIG Research, however, expressed optimism and raised the price target to $103.00 from $77.00.
Taking a different stance, JMP Securities increased their price target for LGI Homes from $150.00 to $160.00, labeling it as an “outperform” stock in their research report.
Despite the range of opinions, StockNews.com recently initiated coverage on LGIH with a “sell” rating—a sentiment echoed by two other investment analysts in addition to this recent evaluation. On the other hand, one analyst has assigned a hold rating while another has given it a buy rating.
Considering all of this information combined, data from Bloomberg.com reveals that LGI Homes carries an average rating of “Hold” among analysts and a consensus price target of $116.25.
In conclusion, institutional investors have made significant changes to their positions in LGI Homes, signaling possible shifts in market sentiment towards the company. However, its lackluster performance suggests that more clarity regarding its growth prospects is necessary before drawing any definitive conclusions about its future trajectory.
Disclaimer: The views expressed here are solely those of the author and do not necessarily represent the views of [Publication Name]. This article is for informational purposes only and should not be taken as investment advice. Please
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