FWIW: Established a small position in Del Webb (WBB) this am.
VL has a writeup with which I pretty much agree. (This in itself is a bad sign -g-.) They too see that P/BV, PSRs are favorable compared to past years. My bet is that company will sell (again) in the hombuilding cycle (maybe within 2 years?) somewhere near 1.5 x book (which next year could be $18) or about 27. Low, I can see about 14...unless something really unexpected happens...
For the stock today at 19+, probably best to wait now 'til it drops back maybe to 18 or lower (book at 17). It's breaking out to new highs ... some people like that (a confirmatiion?!); I do not. (I think my concern that the stock was running away without me got the better of me this am -- Several homebuilding stocks I follow are also hitting new highs now.)
In addition to okay fundamentals, WBB is the country's 6th largest homebuilder with a story: their stereotypical "Sun Cities". Demographics suggest increasing numbers of older people -- which might create interest in their stock as well as their homes. (Yeah, it's probably a well-known, well-told story -- but it could get increasing attention in future.) WBB also beginning to build their communities closer to where prospects now live, that is - a community in Chicago area is being planned vs. typical retirement community in TX, AZ, NV. This might be a successful venture for them.
Given all the shoulds and might-be's , WBB could-be an okay investment for a patient investor, IMO. Paul Senior |
