Lennar is a comany that heavily lobbies the government and receives massive taxpayer largesse. [Mar 18, 2010: Large Public Homebuilders Benefit from Tax Aid - Lobbyists Win Again] They also speculate in distressed debt.
- Lennar Corp., the third-largest U.S. homebuilder, is investing in failed bank loans and distressed real estate assets to boost revenue as demand for new houses shows few signs of revival.
I believe they also have a core business that builds homes, but that is secondary in Cramerica. Lobbying #1, Speculating #2, primary business #3. Yes, in that order... buying Lennar is now almost like buying an investment bank - if only they had access to the discount window.
More importantly I said last year when I sat in awe that people were shocked (just shocked) that more homes are sold in spring and summer than other periods of the year, that I'd take advantage of that surprise in 2010. With today's pending home sales shocking market participants (believe it or not, it's spring and this figure is trending up!) you can see the pattern already forming.
I'll begin a 3% allocation into Lennar (LEN) around $17.50 as its come back to fill a gap from a great earnings report a week and a half ago.
Long Lennar in fund; no personal position