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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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From: UncleBigs1/24/2006 7:56:16 PM
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I think Centex might be a tough short. They bought back $350 million in shares over the past 4 months. That's over $4 million per trading day.

If you look back to January 2002, Centex traded at roughly 1.5 times book and it now trades at 2.2 times book.

At only 6 times next years earnings, the market is clearly forecasting a decline in future profits. Profits can decline while the p/e expands and it may not impact the stock price as much as short sellers hope.

Unless we see rates rise substantially, I can see Centex shares relatively flat over a period of a few years even if home sales drop 25%.
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