People are talking about lawyers now... really? Full disclosure, I started buying PHM about 2 years ago, my first buy was around .23 cents. My highest buy was at 1.39. I first bought in with the intent of holding the stock for 4 years (until 2018) unless something fundamentally changed. The truth (in my opinion) is, things have changed quite a bit over the last two years, and all for the better. I am still on course and holding until 2018 but per my previous statement this can change depending on fundamentals.
Reading the PHM board these days (who am I kidding, for the 2 years I've followed it) is a bit like tearing up a copy of the Onion and the Globe and Mail, mixing up the pages, and then trying to disypher information from entertainment. Here is just one long's perspective on some general things to keep in mind re PHM and some thoughts on recent topics discussed on this board (but as always do your own DD, I'm some random stranger who, believe it or not, will not be effected at all by how much money you make or lose on this or any other investment. I'm as likely to be a complete moron as I am to be a stock guru). Anyway, here it goes:
1. Healthcare stocks have been out of favor for the last 6 - 9 months. They continue to be out of favor. This is a trend. Now I've been doing some research and as it turns out trends tend to change. Unfortunately my research hasn't been insightful enough to educate me on when this trend in healthcare will change. But I've been told that buying stocks when they're cheap (aka out of favor) is better than buying stocks when they're expensive. If, based on your DD, you thought this was a good investment at a 1.50 and bought in then, I would have to imagine this would be an even better investment at these prices (unless of course your DD tells you otherwise).
2. According to the AARP about 8,000 people turn 65 each day in the US. This trend will continue for the next decade or so. That equates to about 2,920,000 people turning 65 each year. Now I'm no mathematician but from where I sit it seems the demographics in the US tend to favor the healthcare sector.
3. Medicare HAS ALWAYS and WILL ALWAYS continue to look for ways to save money. If you have been listening to the CC's over the last two years (or even longer I'd imagine) this is a question that analysts have asked more than once. Margins on PHM's business will always be subject to this pressure (MD, love him or hate him, addressed this question well IMO). This will also be true for their lines of business that have higher margins to date. But I've done some research and as it turns out, this seems to be a trend in every industry!! Amazingly car manufacturers squeeze the margins of their suppliers, retailers do the same, in fact from what I can tell, everybody seems to try to get things cheaper. Go figure.
4. The US government is massively in debt. The US government has been massively in debt for a VERY LONG TIME. I am going to go out on a very long, thin and creaky limb here and say the US government will continue to be in debt for a VERY LONG TIME. Does this mean that the Medicare system will collapse? Well if you think so then why are you wasting valuable time looking at a bullboard for a stock you think is doomed? Better question, why are you (and "you" know who "you" are) posting comments to complete strangers to warn them about a stock that you clearly have no interest in as it's doomed? If you own shares and you believe this then clearly you should sell and move along. Or "you" must be a true knight in shining armor, so selflessly thinking of others whom you don't even know. If that's the case then thank you.
5. This is a US election year. Many politicians are scrutinizing health care costs and making campaign promises around reducing those costs. I've done some research and as it turns out politicians have been known to make campaign promises that, once in office, they don't keep. Amazingly healthcare companies have very strong lobby groups and as it turns out, these lobby groups can sometimes influence government policies, even if those policies contradict campaign promises. Being a leader is hard.
6. This is a trader's dream stock. There are some pretty smart traders on this board making insightful comments that as a long, I'd prefer not to hear. I'd much rather hear everyone, arm in arm, touting just how amazing PHM really is and how we're all going to become massively wealthy tomorrow when the stock shoots up to $5/share because the market finally wakes up and recognizes just how awesome it is. But sadly I will continue to read the trader's insights (and maybe, just maybe use their insights to set buy targets) until we can all sing kumbaya into the sunset. As a long I do believe that day will come... with a lot of patience.
7. This is a basher's dream board. There are many valiant knights ready to defend the good name of PHM as soon as some idiot makes a moronic statement. This has been the case for the entire time I've followed this stock and sadly it's not a trend I see changing any time soon. (footnote - the author of this post equates the term "basher" as being synonymous with the word "idiot" because either, a: the basher in question is posting information that was clearly very poorly researched and hence is an "idiot" for not doing proper DD and then misinforming people based on their poor DD, or b: the basher in question in posting misinformation purposely to create negative sentiment towards PHM for their own gain, which to me is sleazy and underhanded and hence a person of that moral character is an a$$h... I digress, an "idiot".) But with all that said, I sadly hate to say that anyone who bases their investment decisions on what complete strangers are saying on a BB are destined to lose their money.
8. Guests on BNN don't always know all the facts about a company. To be completely frank, my DD and information has often contradicted what guests on BNN have said about this and other stocks. Quite frankly, who cares what they (or I) think. Their opinion of this (or any other) stock is just that, an opinion. I will again go out on my long, thin and creaky limb and guess that many of you who have decided to trade for yourselves may have also had the experience that I did with an investment advisor, aka finding out over time that they didn't really know much about the products they were peddling and ultimately were pushing me into investments that meant a better bottom line for them. But if you feel the need to cling to what someone on BNN says then my suggestion would be to transfer your funds to that person and have them manage your money.
Doing DD is a lot of work but at the end of the day if you do it it's a lot easier to ignore emotionally charged or partially informed comments about your holdings and you are far less likely to make poor decisions with your investments. But what do I know, I might just be some 15 year old whose skipping school and sitting in my mom's basement just trying to kill some time by messing with people on Stockhouse.
That's my rant for the year. I'll now shut my trap, crawl back into my hole, and keep my thoughts to myself until 2017 (maybe).
GLTA here, love it or hate it, PHM certainly keeps things interesting.
Marc