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Zacks Investment Ideas feature highlights: Century Communities, MI Homes and LSI Industries
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For Immediate Release
Chicago, IL – September 23, 2024 – Today, Zacks Investment Ideas feature highlights Century Communities (CCS - Free Report) , MI Homes (MHO - Free Report) and LSI Industries (LYTS - Free Report) .
Time to Buy These Highly Ranked Construction Stocks After Rate Cut
Markets have risen sharply after the Fed decided to cut interest rates for the first time since 2020 on Wednesday.
Amid rate cuts, investors may be searching for specific areas of the economy that may benefit directly in regard to a lower inflationary environment. This makes it noteworthy that several construction sector stocks were added to the Zacks Rank #1 (Strong Buy) list this week.
From mortgage rates falling to their lowest level in over a year to the likelihood of a more favorable operating environment for borrowing costs and new investment projects, here are three of these highly-ranked construction stocks to consider.
Top Home Builder Stocks: CCS & MHO
With it likely that the average 30-year mortgage rate will continue to decline from a multi-year high of 7.08% in October, Century Communities and MI Homes are two of the top homebuilder stocks to consider.
Lower mortgage rates are obviously appealing to homebuyers with Century Communities and MI Homes' Zacks Building Products-Home Builders Industry in the top 17% of over 250 Zacks industries.
Furthermore, post-pandemic demand for new homes remained resilient even as mortgage rates had hit their highest levels since 2002. Considering borrowing costs should become more favorable for consumers and homebuilders, it's very tempting to buy CCS and MHO.
To that point, both stocks are expected to post high double-digit EPS growth in fiscal 2024 while trading at less than 10X forward earnings. Notably, Century Communities earnings are expected to climb another 15% in FY25 to $10.72 per share while MI Homes' EPS is projected to increase 5% next year to a whopping $20.76.
LSI Industries Special Niche
Having a unique niche in the construction sector, LSI Industries stock is very enticing as a provider of high-quality lighting fixtures for various commercial markets.
Most intriguing is that LSI Industries' Zacks Building Products-Lighting Industry is currently in the top 1% of all Zacks industries. Correlating with such, earnings estimate revisions are nicely up over the last 60 days with LSI Industries EPS expected to increase 6% this year and projected to soar another 34% in FY25 to $1.18 per share.
Reassuringly, LSI Industries has reached or exceeded the Zacks EPS Consensus for 18 consecutive quarters. Better still. At $15 LYTS still trades at a reasonable 17.8X forward earnings multiple which is on par with its industry average and a pleasant discount to the S&P 500's 23.7X.
Bottom Line
Like LSI Industries, earnings estimate revisions for FY24 have trended higher for Century Communities and MI Homes stock. This trend should continue with rate cuts upon us, making now an ideal time to buy these highly-ranked construction stocks.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: Century Communities, MI Homes and LSI Industries
For Immediate Release
Chicago, IL – September 23, 2024 – Today, Zacks Investment Ideas feature highlights Century Communities (CCS - Free Report) , MI Homes (MHO - Free Report) and LSI Industries (LYTS - Free Report) .
Time to Buy These Highly Ranked Construction Stocks After Rate Cut
Markets have risen sharply after the Fed decided to cut interest rates for the first time since 2020 on Wednesday.
Amid rate cuts, investors may be searching for specific areas of the economy that may benefit directly in regard to a lower inflationary environment. This makes it noteworthy that several construction sector stocks were added to the Zacks Rank #1 (Strong Buy) list this week.
From mortgage rates falling to their lowest level in over a year to the likelihood of a more favorable operating environment for borrowing costs and new investment projects, here are three of these highly-ranked construction stocks to consider.
Top Home Builder Stocks: CCS & MHO
With it likely that the average 30-year mortgage rate will continue to decline from a multi-year high of 7.08% in October, Century Communities and MI Homes are two of the top homebuilder stocks to consider.
Lower mortgage rates are obviously appealing to homebuyers with Century Communities and MI Homes' Zacks Building Products-Home Builders Industry in the top 17% of over 250 Zacks industries.
Furthermore, post-pandemic demand for new homes remained resilient even as mortgage rates had hit their highest levels since 2002. Considering borrowing costs should become more favorable for consumers and homebuilders, it's very tempting to buy CCS and MHO.
To that point, both stocks are expected to post high double-digit EPS growth in fiscal 2024 while trading at less than 10X forward earnings. Notably, Century Communities earnings are expected to climb another 15% in FY25 to $10.72 per share while MI Homes' EPS is projected to increase 5% next year to a whopping $20.76.
LSI Industries Special Niche
Having a unique niche in the construction sector, LSI Industries stock is very enticing as a provider of high-quality lighting fixtures for various commercial markets.
Most intriguing is that LSI Industries' Zacks Building Products-Lighting Industry is currently in the top 1% of all Zacks industries. Correlating with such, earnings estimate revisions are nicely up over the last 60 days with LSI Industries EPS expected to increase 6% this year and projected to soar another 34% in FY25 to $1.18 per share.
Reassuringly, LSI Industries has reached or exceeded the Zacks EPS Consensus for 18 consecutive quarters. Better still. At $15 LYTS still trades at a reasonable 17.8X forward earnings multiple which is on par with its industry average and a pleasant discount to the S&P 500's 23.7X.
Bottom Line
Like LSI Industries, earnings estimate revisions for FY24 have trended higher for Century Communities and MI Homes stock. This trend should continue with rate cuts upon us, making now an ideal time to buy these highly-ranked construction stocks.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.