Money Investor
Long/short equity

Why D.R. Horton's Q3 2014 Earnings Are Cause For Concern

D.R. Horton (DHI) reported its Q3 2014 earnings this past week, and the stock was hammered on the back of a headline EPS miss. Revenue came in above analyst expectations, but it was the earnings miss, and the reason for that miss that spooked investors.

Horton is the largest new home builder by volume in the U.S. It is a fairly diversified builder, with brands intended to serve the entry level, move up, and luxury home buyer. The company has aggressively invested in land as the housing market emerged from the doldrums, and currently controls 180,000 lots across the country (with 125,000 owned). This is a company that is all in on the housing recovery. Cash on the...

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