Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Meritage Homes Corp (NYSE: MTH ) dropped as much as 10% today after the company reported earnings.
So what: Homes closed in the first quarter were up 5%, to 1,109, and revenue jumped 21%, to $408.3 million, but fell short of the $438 million estimate. On the bottom line, net income more than doubled, to $25.4 million, or $0.62 per share, but fell $0.02 short of estimates.
Now what: This is more of a sign of the macro environment in housing than a specific problem at Meritage. Unit sales were down overall in the first quarter, and I actually think Meritage did a nice job shifting to higher-end homes, where sales are more brisk. This is a short-term challenge, and I don't see a reason for long-term investors to panic today.
A top stock with great long-term prospects
There are great stock buys even in today's market. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report, "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.