Lennar stock has lots of accumulation by large players on the way down. This is an extremely dangerous stock to be in, in this rising rates environment but apparently it just got too cheap for some larger players.
From a technical perspective, the chart looks awesome with a huge positive divergence between large players volume and price. Even the Twiggs Money Flow is rising and looks poised to break above the zero level.
Analysts are giving the stock a buy rating. Overall, there are no sell ratings, 3 hold rastings, and 16 buy ratings on the stock.
This stock is a good example of why ignoring fundamental analysis could get you killed in this market.
Lennar stock currently trades at a P/E of 13, and a Forward P/E of 8. Whenever you see valuation metrics that look this good, you should look at the profit margin for signs of a value trap. Lennar’s low profit margin of 6.84% raises the risk that this stock is a value trap.
With home builder stocks in a downtrend in this rising rates environment, I have to give Lennar stock a too hot to handle rating.
If large players believe housing stocks have gotten too cheap and will rise one more time before going lower, more power to them but for us amateur traders that don’t have the purchasing power of large players, I think we should stay clear of this one. There are too many other good stock picks out there than to try and bottom feed in homebuilder stocks IMO.