Quick Win by the Algorithm: Upbeat Future and Q4 Earnings Boosts HOV Over 50%

Quick Win by the Algorithm

On November 21, 2016, the I Know First algorithm had predicted a bullish forecast for Hovnanian Enterprises, Inc. (HOV).  HOV had a signal of 30.08 and a predictability of 0.41. In accordance with the algorithm, the company reported a capital gain of 58.63% experiencing a quick win by the algorithm.

Quick Win

Hovnanian Enterprises, Inc. (HOV), designs, constructs, markets, and sells residential homes in the United States. It constructs single-family detached homes, attached townhomes and condominiums, urban infill, and active lifestyle homes.  The company was founded in 1959 and is headquartered in Red Bank, New Jersey.  The company focuses on two main operations: homebuilding and financial services.  In the year 2016, the company constructed 6,712 homes.  The financial services offered are: mortgage loans and title services.

Quick Win

As the the economy improves, so did the housing market.  According to  Bloomberg, the national home price increased by 5.6% from 12 months earlier.  The average house price in the United States have surpassed the pre-recession level.  Although first time buyers continue to find difficulty in purchasing a home, the demand is convincing home builders to increase supply in the market.

Despite underachieving earnings expectations in the past three earnings estimate, analysts continued to raise the company’s earnings expectations.  On December 8, 2016, the company surprised the market and surpassed analyst expectations by 33% after reporting a $0.20 EPS compared to $0.15 expected.  Resulting in the stock to continue its bullish trend.  Moreover, this gave investors more confidence in seeing value in a stock with a P/S of 0.15.

This bullish forecast on HOV was sent to current I Know First subscribers on November 21st, 2016. 

Before making any trading decisions, consult the latest forecast as the algorithm constantly updates predictions daily. While the algorithm can be used for intra-day trading the predictability tends to become stronger with forecasts over longer time-horizons such as the 1-month, 3-month and 1-year forecasts.

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