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Beazer Homes USA Pick (BZH)

|Includes: Beazer Homes USA, Inc. (BZH)

A builder well under book value, with recent demonstrated ability to roll their debt, ample cash, heavy recent share price weakness, and a capital plan in place that emphasizes deleveraging and a significant, but not overly optimistic revenue goal.

Normally I wouldn't be so optimistic about a company with stated goals to reach ~8x EV/EBITDA at current share prices but hey.....this is a builder we're talking about here.

I simply do not see the share price languishing around these levels for years and years, and think it could return 50% in a couple years. Hedge funds always seem to love this sector, and bid it up to ridiculous levels in times of optimism. All the more reason to buy this well run company on a good valuation in a medium term dip.

BZH share price as of open April 5th, 2016


Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.