MTH - Meritage Homes: An Upgrade Heading Into Earnings On Strong Orders

2024-04-21 08:16:32 ET

Summary

• Meritage Homes stock offers upside potential and is a strong buy due to its robust financial health and emphasis on single-family properties.
• Despite recent weak financial performance, the company has seen strong order growth and improving cancellation rates.
• There is a long-term shortage of new single-family properties, creating a favorable market for companies like Meritage Homes, and the stock is currently cheap.

One of the things that I love most about home building companies is that they tend to provide plenty of financial metrics that show not only where they are today, but also where they seem to be headed. When you pair this up with economic data and make sure that you buy the stocks at a cheap enough price, upside is very difficult to avoid. One firm that I believe does offer some really great upside at this point in time is Meritage Homes ( MTH ). Since initially writing about the company in January 2022, I have become quite a fan of the business. Its emphasis is on single family properties, which might not be as popular as the multifamily properties that some have come into favor. But overall financial health of the firm is robust and shares seem to offer some nice upside potential....

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