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LGI Homes, Inc. is a home builder engaged in the design, construction, marketing and sale of new homes in Texas, Arizona, Florida, Georgia, New Mexico South Carolina, North Carolina, Colorado, Washington and Tennessee. The company has five geographic segments. The Texas division includes operations in Houston, Dallas / Fort Worth, San Antonio and Austin. The Southwest division operates in Phoenix, Tucson, Albuquerque, Denver and Colorado Springs. The Southeast division works in Atlanta, Charlotte and Nashville. The Florida division has operations in Tampa, Orlando, Fort Myers and Jacksonville. Finally, the Northwest division operates in Seattle. The company offers entry-level and move-up homes.
In early July, LHGIH announced that 355 homes closed in June 2016, up from 331 in June 2015, representing year-over-year growth of 7.3 per cent. In addition, the company announced record-breaking quarterly home closings of 1,128 for the second quarter of 2016, finishing out the first six months of the year with 1,972, a 29.4-per-cent increase year-over-year. As of the end of June 2016, LGI had 56 active selling communities.
The stock will join the S&P 600 Small Cap Index as of the close of trading on July 27. It has performed well since stabilizing in the first quarter, rising more than 80 per cent. Over the past month, it is up nearly 18 per cent.
Validea's Guru System classifies this stock as both a growth and value stock given its P/E Ratio of 13.1 and its historical EPS growth rate of 81.7 per cent.
LGIH shows persistent earnings growth. Annual EPS before extradordinary items for the last five years (from earliest to the most recent fiscal year) were 0.17, 0.50, 1.07, 1.33 and 2.44. This passes the test for James O'Shaughnessy's Cornerstone Growth-inspired model. That model also likes the company's price / sales ratio of 1.08, based on trailing 12-month sales.
The Martin Zweig-inspired model likes the 13.1 P/E ratio and the company's long-term revenue growth (94.39 per cent) in relation to long-term earnings growth (81.68 per cent).
LGIH's profit margin of 8.46 per cent passes the Motley Fool-inspired model criterion of a minimum trailing 12-month after-tax profit margin of 7 per cent.
The company's sales growth rate is 94.4 per cent, based on the average of the 3- and 4-year historical sales growth rates, passing the John Neff-inspired model's sales growth test.
The stock passes Validea's Momentum Investor screen with flying colors, earning a score of 100. Price performance versus all other stocks, a criteria in that model, is of particular note, as LGIH's 12-month relative strength is at an exceptional level of 94.
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