Listen: Lennar Stock Jumps as Pivot to Low-Price Homes Pays Off and Boeing Stock Loses More Support Over the 737 MAX
"Got two very different announcements from the same company. We have a group of economists to consider. But we're going to start today with housing Lanar the number two homebuilder in the US reported fourth-quarter results profit and revenue both came in higher-than-expected Lanar also bumped up their guidance for the number of homes. It expects to deliver in two thousand twenty. This is a really good way to end the fiscal year. It's a boomer of story. They we're supposed to turn they. They were supposed to report expected report about six point. Five billion in revenue and they came in at about seven billion which. That's a lot more. I mean for housing. That's a pretty predictable industry so for them to come in that much higher some of it has to do with the fact that you know interest rates have remained remained so low and people are the housing market has done really well but lenore made a great choice a couple years ago. And it's a really interesting study study in you know in in corporate governance where they kind of leaned into the trend of people renting instead of buying. You know what we're going to go back into low priced and we used to call starter homes. We're going to make that a core of our business and not too many other homebuilders. I did that. And it's paying off in a huge way so shares of Lenora up about three percent this morning. You you look at this strong quarter bumping up the guidance for for twenty twenty I felt like the stock should have been up a little bit more but it had a pretty good run over the past twelve months. It's had an okay run. I mean it's trading get a pe of less than ten even after the run-up and one thing that is definitely true about homebuilders is that sometimes low peas are or not necessarily a signpost that the that the stock is undervalued because because it's such a cyclical industry. And I don't know I. I don't know that people still trust that. Interest rates are going to remain. Low inflation is going to remain. Jack I think people are still a little oh bit shell shocked from what happened a decade ago in this industry. But it's a well run company. I'm and and we In other areas have you know have have looked at this trend of low cost housing and low priced housing stock as well we. We've recommended a company called legacy housing which is very similar. You know has a very similar strategy. So yeah it was a great quarter and the companies You know the company's running on all cylinders but it yet but you're right. The stock didn't seem mm to react in a way that you might expect Boeing shares down a bit this morning in the wake of the crash of Ukraine International Airlines flight. Seven fifty two minutes after taking off in Tehran. The seven thirty seven crash killing all one hundred seventy six people on board of the terrible tragedy the from the business standpoint of a new crisis. Well she's GonNa say you know. This is not a seven thirty seven Max. Because they're all grounded. This is an older model. The seven thirty thirty seven eight hundred but to your point this is yet another thing for For Boeing to respond to. Yeah so the grounding of the seven thirty-seven Max and how Boeing handled that entire situation As cost them about nine billion dollars in revenue so far they were selling about one point. Five a billion dollars in the 737 Max per month and it costs Dennis Muilenburg the former. CEO His job. The seven thirty seven eight hundred is a different beast. According to air safe which is an organization that tracks airline safety you know. So it's very well named organization seven thirty seven eight hundred among the world's safest planes So we don't know as we're recording this what has happened with the flight The Iranian government came out immediately and said that it was an engine. Malfunction The Ukrainian embassy in Tehran came out very quickly. Cleon said that it was not terrorism and then they pulled that report the Ukrainians The governments of France Germany and Netherlands or have have restricted their planes from flying in Iranian airspace as a result the crash. So we don't know it's it's it's it's you know obviously Veasley. My first thought goes out to those affected. Because you know anytime you see something like this. It's it's gut wrenching but there are you know there are implications for for you. Know for for Boeing as well and they're neat new. CEO's going to you know is going to have to address it. When you look at Boeing Stock Doc which is close to a two year low? I don't know there's I feel like they're still so many questions that it's not even something I wanna want to put on my watch list. Even though I completely understand that a reasonable outcome for this business and therefore for this stock is that twenty twenty years the year all of these issues get resolved The the Max's get back online order star bumping up and in the next five years. This is a stock. That's up fifty to seventy. I hope it doesn't sound too cra- crass to say that passenger deaths are apart of the business of making airliners. I mean that's just airplanes. Do something that is bending the laws of physics and occasionally physics wins But given what happened with seven thirty seven Max. They have billions of dollars in potential liability in suits from you know from from from passengers because it does seem like and I'm not making a legal judgment here that there's a case to be made that there was malfeasance or misfeasance or something of that nature. On the part of Boeing. Boeing is still the one half of a duopoly and in the long term. I think that had you know I. I think that the stock is probably a pretty good bargain where it is here but there are going to be plenty of of questions in the near"