Profit Pregame

Here’s My Favorite Stock to Play the Lull in Homebuying

After having an unbelievable start to 2021, the housing market is starting to cool off.

Existing home sales fell to 5.58 million in April – down 2.7% from the prior month. That marks the third straight month of declining home sales.

But the dip could provide some great profit opportunities.

And there’s one company I’ve got a close eye on.

The continued drop is due in part to increasing home prices as demand for homes still far exceeds supply. But buyers have shown that they’re willing to pay well over market price for available homes, so it may be that the lack of supply is what is slowing sales.

Overall, housing demand is still around 20% higher than the first four months of 2020.

In April, housing inventory rose 10.5% from the prior month, indicating that homebuilding is spiking once again.

Despite the hot market, homebuilder D.R. Horton, Inc. (DHI) is off the highs it established on May 10 by nearly 15%.

This may present a fantastic opportunity during the lull in home sales to pick up shares of this strong stock at a significant discount.

Trading tip of the week

The value of anything, including Bitcoin is the difference of what someone will pay for it and someone will sell it for.

So Bitcoin could, in theory, go to $10,000 or $100,000 in the next couple of weeks, because more aggressive sellers price goes lower, more aggressive buyers, price goes higher.

Earnings report to watch

AutoZone, Inc. (AZO) could be poised for an earnings beat this week when it reports the results its of the latest quarter.

We’ve seen positive revisions from analysts of late, which is typically a good sign for a beat.

And with the stock having experienced a sharp decline over the course of last week, surpassing expectations could set up a big move.

Keep an eye out for this report on Tuesday before the open.

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