MHO - M/I Homes: Buy Now At Decade Low Valuation Multiples

• Talking about a housing crash generates a lot of click bait in the news today. The reality is far different. Housing is on firm footing.
• Builders are operating in an environment where demand is massively greater than supply. An environment where they cannot build enough houses to meet demand.
• Rising mortgage rates will curtail some demand, but when demand is excessively higher than supply, that is exactly what the Fed wants to happen. Builders will still win in this environment.
• M/I should earn almost $16 per share in 2022 after earning over $13 in EPS in 2021. Year-end book value should approach $73 per share.
• Either the market will correct this valuation discrepancy, or an activist will force M/I to do what it should be doing, which is to use its substantial cash flow to aggressively repurchase stock at a 35% discount to book value.

For further details see: