M/I Homes (MHO) Resuming 2020 Advance?

Conclusion, Investment Implications, Strategy

M/I Homes, Inc. (MHO) is amid favorable conditions to resume its July 2020 Strategic advance. A sustained rise above the $59.63 area would target a retest of the 74.85 all-time high. This is an Asbury Value trade idea.

Editor’s Note: M/I Homes, Inc. is expected to report earnings on Wednesday 10/27/2021 before the market open, so more conservative investors may consider waiting to buy this stock until after the information is released. Earnings reports can trigger spikes in volatility that can positively or negatively affect prices. The report will be for the fiscal Quarter ending Sep 2021. According to Zacks Investment Research, based on one analyst’s forecast, the consensus EPS forecast for the quarter is $3.55. The reported EPS for the same quarter last year was $2.51.

Analysis and Rationale

M/I Homes, Inc. (MHO), together with its subsidiaries, operates as a builder of single-family homes in Ohio, Indiana, Illinois, Michigan, Minnesota, North Carolina, Florida, and Texas, the United States. The company operates through Northern Homebuilding, Southern Homebuilding, and Financial Services segments. It designs, constructs, markets, and sells single-family homes and attached townhomes to first-time, millennial, move-up, empty-nester, and luxury buyers under the M/I Homes brand name. The company also purchases undeveloped land to develop into developed lots for the construction of single-family homes, as well as for sale to others. In addition, it originates and sells mortgages; and serves as a title insurance agent by providing title insurance policies, examination, and closing services to purchasers of its homes. The company was formerly known as M/I Schottenstein Homes, Inc. and changed its name to M/I Homes, Inc. in January 2004. M/I Homes, Inc. was founded in 1976 and is based in Columbus, Ohio.

The rightmost green vertical highlights in Chart 1 below show that MHO is currently rebounding from an Oct 12th test of its 200-day moving average, a widely-watched major trend proxy currently situated at $59.63 (upper panel), amid an upturn in Strategic price momentum according to the MACD indicator. The other green vertical highlights show that similar upturns in the MACD coincided with recent price bottoms on Jly 19th and May 4th. In addition, the green ellipse shows that that the MACD is rising back above its zero line, indicative of an emerging positive intermediate term price trend.

These conditions set up a low-risk opportunity to buy an uptrending stock in a potentially low-risk/high reward environment while situated just above major support, and target an eventual retest of MHO’s $74.85 May 10th high.

Chart 1

Table 1 below shows that with an upside target of $74.85 and a protective stop placed below the $58.75 area, a long entry price of $61.85 would provide a 1:4.2 risk/reward ratio (risking $1.00 to make $4.20) with an initial risk of 5.0%.

Table 1

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Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.

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M/I Homes (MHO) Resuming 2020 Advance?

Conclusion, Investment Implications, Strategy

Analysis and Rationale

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M/I Homes (MHO) Resuming 2020 Advance?

Conclusion, Investment Implications, Strategy

Analysis and Rationale

Asbury Research

Asbury Research subscribers get more detail on our latest analysis, and updates to our quantitative models

Schedule A 15-Minute Zoom Meeting With Us To Get More Information >>>

Asbury Research subscribers get more detail on our latest analysis,
and updates to our quantitative models