Bull’s Eye Report: MDC Holdings (MDC)

Buy MDR at current levels, or on a pullback to $38

   

At StateoftheMarkets.com, we strive to “own the best and ignore the rest” in our equity portfolios. Toward this end, each day we search our database for a “top stock” (a top rated company in terms of earnings strength as well as company and industry performance) that presents a strong technical “set up” and a good entry point.

In short, when our equity team is looking to add a stock to one of our portfolios, the “bull’s eye” stock shown below is generally their first choice.

Company Symbol Industry Stock Rating YTD% Gain S.T.
Stop Loss
MDC Holdings Inc MDC Homebuilding 9.4 +5.43% $37.71

Why We Like the Company:

MDC Holdings Inc (NYSE:MDC) is our most compelling buy today due to the fact that it is a top rated stock (in terms of earnings strength and company/industry performance) in a strong sub-industry, homebuilding. Along with other homebuilders KB Home (NYSE:KBH), D.R. Horton (NYSE:DHI), NVR Inc. (NYSE:NVR), and PulteGroup (NYSE:PHM), MDC has exhibited considerable strength for quite some time. While MDC had a pretty lackluster February, the pullback and subsequent rebound in early March shows that homebuilding stocks aren’t done just yet. Currently sitting on its 50-day moving average, MDC has an immediate upside to $42 (end of January highs) with some support at $38. We would strongly consider adding MDC here, or back around $38 for a short term trade. However, if the stock is unable to hold $38 on a subsequent pullback, we might step aside.

We Would Be Buyers:

At the current price (~$38.90), or on a pullback to ~$38.

Company Profile:

MDC Holdings, Inc. operates in the two business segments: homebuilding and financial services. The homebuilding operations consist of wholly owned subsidiary companies, which purchase finished lots for the construction and sale of single-family detached homes to homebuyers under the name Richmond American Homes. The financial services and other segment consists of HomeAmerican Mortgage Corporation (HomeAmerican), which originates mortgage loans for the homebuyers; American Home Insurance Agency, Inc. (American Home Insurance), which offers third-party insurance products to the homebuyers, and American Home Title and Escrow Company (American Home Title), which provides title agency services to the company and its homebuyers in Colorado, Florida, Maryland, Nevada and Virginia. The financial services operations also include Allegiant Insurance Company, Inc.

Stock Rating: 9.4

The Stock Rating indicates the combined score of our proprietary Earning Strength and Company Performance models. The rating scale is 0 – 10 with 10 being the highest.

MDC Holdings – Last Three Months

MDC 1 300x168 Bulls Eye Report: MDC Holdings (MDC)
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MDC Holdings – Last 12 Months

MDC 2 300x168 Bulls Eye Report: MDC Holdings (MDC)
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MDC Holdings – Last Five Years

MDC 3 300x168 Bulls Eye Report: MDC Holdings (MDC)
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At the time of publication the editor and affiliated companies own the following positions: None

Note: Positions may be bought or sold while this publication is in circulation without notice.


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