Posted:
#1
Long time stalker on the sports wagering boards. Don't really post as I could throw up my picks, but really, with all of the other great posters on here, why bother with my shots in the dark? I definitely appreciate all of the time and effort others put in, and feel like this board may be my best hope to make a meaningful contribution as I have a pretty decent background (I have been investing in stocks since I was 14) and work as public accountant with a Big 4 firm, so I know a thing or two about financial statements.
Anyways, enough with my brief introduction. I am hoping someone can explain to me why not to buy DHOM. I have pretty decent background in stocks, but am usually more of a long-term value investor (i.e. MO, XOM, BAC (until recently), etc.)
Anyways, my thought about this company is that it pretty much blows. Homebuilder that was not even making a great return before the housing bubble began to pop. However, it has been hit so hard that it now has a Market Cap of $13 million. If you check out its latest Q, its book value is considerably higher than this.
Now, if this was a manufacturer, I wouldn't place too much stock in book value. But this is a home builder, and the majority of its assets are real estate based. The real estate has already been written down to the lower of cost or market. And, while the real estate market has dropped, land is land. It will always hold a value and should eventually appreciate over time. It is not like having an inventory full of clothes, or computer chips that are tough to sell.
Why is this selling for so low? I do my own research on stocks, but have not seen a single article, report on this one. I'm hoping someone out here who may have a little more experience in the market can explain to me why not to buy this stock, because I usually shy away from stocks like this, but I just can't see how this company, can really be worth $13 million when you look at its balance sheet.
Thanks in advance for any help.
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