Beazer Homes: LOOK OUT BELOW

by Dave Kranzler, Investment Research Dynamics

I have to hand it to you on your research on BZH. I bought your report on BZH a few weeks ago and more or less forgot about it. Then I noted the BZH earnings release last Friday. Reread the report and thought, time to act. Shorted 400 shares BZH Thursday January 29 @ 17.05 and picked up 50 BZH FEB 20. 2015 strike 15 PUT contracts right before the close @ 18 cents/contract. I’ll be honest, BZH had just dropped quite a bit from the $19 area to $17, so I thought the window for making money had closed. But the more I read the report, the more I thought you were on to something. Sold the PUTS today for 70 cents/contract. Going to hold the stock short for awhile. I think it bottoms short term here in the 13-14 area. Thanks all to you. The best $25 I ever spent. Looking forward to your new report that you say, “Wall Street would never write.” – BZH research buyer

Beazer reported its latest quarter (Q1, FY 2015) on Friday morning. When you blow away the heavy smoke blown by the CEO, Beazer’s home closings (actual unit sales) plunged 14.7% vs. the same quarter last year. Forget about “orders” and selling prices, unit sales volume was crushed. Its cash down 57% from just thee months ago and inventory climbed 7%. The stock dropped 8.5% on Friday. BUT, it dropped another 9% today on 3x its average volume and on no news: BZH Continue Reading>>>

Sharing is caring!