LGI Homes (LGIH) since 10/15 has seen December $120 calls accumulate 2,475 contracts, a position worth $1.35M in a name that rarely sees options activity. LGIH tends to screen well annually but has lagged homebuilder peers, shares at a long-term VPOC currently with progressively lower highs on the weekly chart and well off the $187 high in 2021. LGIH can trigger a nice inflection trend break over 121.50.

LGIH is engaged in the design, construction and sale of new homes in markets in Texas, Arizona, Florida, Georgia, New Mexico, Colorado, North Carolina, South Carolina, Washington, Tennessee, Minnesota, Oklahoma, Alabama, California, Oregon, Nevada, West Virginia, Virginia, Pennsylvania, Maryland and Utah.  LGIH offers multiple product lines, including attached and detached entry-level homes and active adult offerings that are marketed and sold under our LGI Homes brand and luxury homes that are marketed and sold under our Terrata Homes brand. In 2023, LGIH closed 6,729 homes at an average sales price per home closed of $350,510.

LGIH has a $2.7B market cap and trades 10X Earnings, 13.4X EBITDA and 1.41X Book with revenues seen rising 29% in FY25 and EPS up 31%. LGIH recently announced September home closings +7.2% Y/Y.

At a high level, the housing market remains healthy with demand supported by strong fundamentals, including household formations and migration trends, years of underproduction, and a lock-in effect limiting the supply of resale homes. Additionally, we’re witnessing a resilient labor market with historically low unemployment. Affordability has been the key challenge for consumers.