The growth of the EPS is critical in understanding the current valuation of Lyon William Homes. The EPS growth rate, as it is typically called, is usually expressed as a percentage, which at this time is hard to estimate, but revenue growth has been 21.00% over the last twelve months. EPS growth is a vital measure of execution of the strategy for Lyon William Homes since it indicates how well the business is allocating resources to benefit shareholders.



Lyon William Homes is in the homebuilding and construction industry and is in the consumer cyclical sector. The company CEO is Matthew R. Zaist. William Lyon Homes, along with its subsidiaries, designs, constructs and sells single-family detached and attached homes in California, Arizona, Nevada, Colorado, Washington and Oregon.

Previous Intraday Performance:

The WLH shares had a previous change of 1.57% which opened at 14.58 and closed at 14.92. It moved to an intraday high of 15.00 and a low of 14.55.

SeekingAlpha:  William Lyon Homes (WLH) CEO Matt Zaist on Q4 2018 Results – Earnings Call Transcript

Historical Performance:

Over the last five trading days, WLH shares returned 7.42% and in the past 30 trading days it returned 14.24%. Over three months, it changed 24.33%. In one year it has changed -42.68% and within that year its 52-week high was 29.81 and its 52-week low was 9.85. WLH stock is 51.47% above its 52 Week Low.

Our calculations result in a 200 day moving average of 17.84 and a 50 day moving average of 12.47. Right now, WLH stock is trading -16.37% below its 200 day moving average and may not be a great opportunity to buy as it may continue to trend down.

SeekingAlpha:  William Lyon Homes (WLH) CEO Matt Zaist on Q4 2018 Results – Earnings Call Transcript

Liquidity:

The company has a market cap of $563.3m with 37.8m shares outstanding and a float of 36.2m shares. Trading volume was 464,532 shares and has experienced an average volume of 515,660 shares. Our calculation, using the current average volume and close price, leads me to believe that the liquidity is bad, highly speculative and an investor may want to avoid this stock.

Earnings:

The last annual reported EPS for Lyon William Homes was 1.22 which ended on 31st of December 2017, which according to the previous close, that is a PE of 12.23. Based on 2 analyst estimates, the consensus EPS for the next quarter is 1.09. The trailing twelve month EPS is 2.44, which comes to a trailing twelve month PE of 6.11.

Below was the last reported quarterly earnings per share:
12-31-2018:  0.91
09-30-2018:  0.68
06-30-2018:  0.58
03-31-2018:  0.27

Base on our calculations, the intrinsic value per share is 34.00, which means it might be undervalued and has a margin of safety of 56.12%



Indicators Also to Watch:

Based on the latest filings, there is 129.60% of institutional ownership. Short-interest was 1,971,829, which was 5.22% of shares outstanding. The short-interest ratio or days-to-cover ratio was 3.91. This stock has a moderate level of short interest, but may still be a buying opportunity depending on other indicators.

I calculated the beta to be 1.66

SeekingAlpha:  Daily Insider Ratings Round Up – Jan. 14, 2019

Fundamental Numbers:

Based on last reported financials, the company’s return on equity is 8.87%, return on assets is 2.75%, profit margin is 5.02%, price-to-sales is 0.39 and price-to-book is 0.65.

Company Score Card:

Results are out of six:
 1  : Growth Expectations Result
 2  : Financial Safety Result
 3  : Past Performance Result
 5  : Valuation Result
 0  : Dividend Safety Result
 2  : Overall Result

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Jake McWilliams
I am an independent trader, analyst and algorithmic trading expert, having worked both for the sell side (brokerage) and the buy side (fund administration). I have been trading professionally for about 20 years. I trade stocks and forex and I play both long and short positions in underlying asset or through options. I have experience with discretionary and fully automated systems (Metatrader and Quantshare).

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