Opinions The Panic-Proof Portfolio (Stockchase Research)
Pulte Homes IncPHMTOP PICKNov 10, 2020
Stock price when the opinion was issued
As of Jun 05, 2026. Market Open.
You might be interested:
In terms of earnings and revenues, there's little hope here, but there's a huge undersupply of US homes. Trump is trying to invigorate the US homebuilding space by barring institutional buyers. PHM has an opportunity to supply many homes.
Gordon ReidGood opportunity here. Mid-range homebuilder. In 26 states. Good valuation around 10x PE. Some of the heat will come off the mortgage market, which will benefit homebuilders. Yield is 1%.
Gordon ReidHas sharply risen since July with strong volumes. Has reached overbought territory now, at 52-week highs. The Chaikin Moneyflow which reflects institutional buying has been great. Has been making higher highs and higher lows. Lang says this could hit $200 next year.
;fill-opacity:1;'/%3e%3cpath%20d='M31%2018.6001V30H8V18.6001L14.1334%2022.4334L19.4999%2014L24.8669%2022.4334L31%2018.6001Z'%20fill='%23EE5432'%20style='fill:%23EE5432;fill:color(display-p3%200.9340%200.3310%200.1956);fill-opacity:1;'/%3e%3c/svg%3e){kind=small}
Premium contentOur PAST TOP PICK with PHM has triggered its stop at $109. To remain disciplined, we recommend covering the position at this time. This will result in a net investment gain of 36% when combined with the previous buy recommendations.
Premium contentPremium contentPremium contentPremium contentPremium contentPremium contentWe reiterate PHM as a TOP PICK. Recently reported earnings indicated a 43% increase in orders, which helped beat earnings expectations. It trades at 8x earnings, under 2x book and supports a 30% ROE. We like that cash reserves are growing, while debt is retired and shares bought back. We recommend trailing up the stop (from $65) to $69, looking to achieve $96 -- upside potential of 17%. Yield 0.7%
(Analysts’ price target is $95.47)Premium contentThe US homebuilder saw a 24% increase in new orders over the year and 2nd quarter revenues were up 8% to over $4 billion. It trades at 7x earnings, 1.7x book and supports a 31% ROE. We like that cash reserves are growing, while debt is aggressively retired and shares bought back. We recommend a stop-loss at $65, looking to achieve $97 -- upside potential of 23%. Yield 0.8%
(Analysts’ price target is $97.27)Premium contentPremium content
Stockchase Research Editor: Michael O'Reilly This well diversified US home builder will continue to benefit from 30 year mortgage rates near historic lows -- especially as pandemic driven demand continues. It is trading at 8.5 times earnings, and projected to be only 7 times next years earnings. It pays a small dividend that is backed by an 11% payout ratio. Analysts at Raymond James and RBC upgraded their outlooks to $60 and $53, respectively. We would trade this with a $35 stop-loss, looking to achieve $52 -- over 23% upside. Yield 1.18% (Analysts’ price target is $52.21)