Markets

Stock of the Week: D.R. Horton, Inc

DHI from Chaikin Analytics for Desktop2015

D.R. Horton (DHI) has a Neutral+ Chaikin Power Gauge stock rating and has triggered an Oversold Buy signal in Chaikin Analytics. The Neutral+ rating means that DHI has strong underlying fundamental factors but has violated a key support line. Given the extreme volatility and market weakness in the current market, this is normal behavior.

Of particular note is that DHI has held above its August panic low and has traced out a series of higher highs and higher lows, a very bullish technical pattern.

D.R. Horton is one of America’s largest single family home builders, with over $10 billion in revenue. The stock has been been referenced in many articles over the past 3 months when analysts have talked about the boom in housing in the U.S., as a strong stock in the strong Home Building group. For investors looking for buy ideas in today’s uncertain market, DHI is attractive.

The stock held up remarkably well in the August panic selling, failing to break its July lows, with Chaikin Money Flow staying positive on the decline. Chaikin Money Flow is still positive, indicating that institutional selling is not contributing to the recent pullback. The stock continues to outperform the market and combined with strong fundamentals and very bullish technical patterns is an attractive buy at current levels.

There is a dearth of housing in America. With wages rising, mortgage rates still attractive and the employment picture robust, America’s workforce is in a strong position to sell their existing homes and move where the jobs are. New housing needs to be built to accommodate them and the millennials, who are now looking at owning vs. renting, are gradually seeing the benefits of home ownership.

D.R. Horton has a Neutral+ Chaikin Power Gauge stock rating that is driven by a bullish earnings outlook, very strong price and volume activity, positive earnings estimate revisions and the strength of the Homebuilding group.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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