In this chart above, you need to focus on the 200-day moving average. In December, January, May, June, and August LEN dips toward the rising 200-day average. These dips turned out to be good buying opportunities. Now LEN is below the 200-day moving average. We are about to see a dead cross from the 50-day and 200-day averages. The On-Balance-Volume line is flat. Our trigger point would be a close below $47. Below $47 the chart is bearish and traders should act accordingly.
TheStreet Ratings team rates LENNAR CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
We rate LENNAR CORP (LEN) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, notable return on equity and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 9.5%. Since the same quarter one year prior, revenues rose by 23.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- LENNAR CORP has improved earnings per share by 23.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, LENNAR CORP increased its bottom line by earning $2.81 versus $2.14 in the prior year. This year, the market expects an improvement in earnings ($3.37 versus $2.81).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Household Durables industry and the overall market on the basis of return on equity, LENNAR CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- Net operating cash flow has increased to -$93.88 million or 46.90% when compared to the same quarter last year. Despite an increase in cash flow of 46.90%, LENNAR CORP is still growing at a significantly lower rate than the industry average of 166.40%.
- You can view the full analysis from the report here: LEN
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.