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Green & Gold Fund Recommendation: Buy D.R. Horton, Inc. (DHI )

Green & Gold Fund Recommendation: Buy D.R. Horton, Inc. (DHI ). Key Investment Points. Housing market indicators are strong Room for recovery Housing recovery began in mid 2011 Financially sound Overall, better than competitors. Industry Overview. Homebuilders and mortgage financiers

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Green & Gold Fund Recommendation: Buy D.R. Horton, Inc. (DHI )

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  1. Green & Gold FundRecommendation: Buy D.R. Horton, Inc. (DHI)

  2. Key Investment Points • Housing market indicators are strong • Room for recovery • Housing recovery began in mid 2011 • Financially sound • Overall, better than competitors

  3. Industry Overview • Homebuilders and mortgage financiers • Major companies • DHI, PHM, MDC, RYL, NVR, KBH, LEN • Home construction, sale, and financing • Also some deal in land acquisition and development

  4. Housing Starts

  5. Housing Market Index

  6. Construction Spending

  7. S&P Case-Shiller HPI

  8. New Home Sales

  9. Economic Data Summary • S&P Case-Shiller HPI (26 March) • M/M 1.0% (C, prior M/M 0.9%) • New Home Sales (23 April) • 417K (MC, prior 411K rev.) • Housing Starts (16 April) • 1.04 M (BC, prior .917 M) • Housing Market Index (15 April) • 42 (MC, prior 44) • Construction Spending (1 April) • M/M 1.2% (BC, prior M/M -2.1%

  10. DHI Company Profile • Homebuilding and Financing • Constructs, sells, and finances homes • Domestic market • Acquired Breland Homes (2012) • 2011 Revenue: $130 M • Q2 2013 DHI Earnings • 26 April at 10:00 AM Eastern

  11. DHI Price Chart

  12. DHI vs S&P vs XHB

  13. DHI Financials

  14. DHI Financials • Low numbers leading up to the housing crash • Recovering numbers coinciding with the better housing numbers • Sales, revenue, net income, etc. are all expected to rise

  15. Comparison to Industry

  16. SWOT Analysis

  17. Investment Thesis • We should own DHI because: • Housing market still has much room to recover • DHI has good financials and can capitalize on the recovery • Beware of financial news indicating slowdown

  18. Current Portfolio and Recommendation • Sector : Industrials and Materials • Industry Group: Residential Construction • Current Holdings: UPS, GE, XLI, GDX, XYL, and SAND • Buy 250 shares of DHI at $24.00 (approximately $6000.00, 1.09% of portfolio)

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