LEN now presents a striking divergence: short sellers added positions at the fastest weekly pace in months, yet options traders flipped to their most bullish reading of the past year.
The short interest story has not changed direction — it has accelerated. SI as a percentage of the free float climbed to 7.4% by May 19, up 13% week-on-week and 58% over the past month. From the mid-April base of around 4.3%, bears have nearly doubled their exposure in five weeks. Tuesday alone saw a single-session jump of 6%. This is deliberate, conviction-driven positioning ahead of the June 12 earnings date — not a technical or mechanical build.
The borrow market offers shorts no friction. Availability remains extraordinarily loose at 1,234% — meaning the pool of lendable shares dwarfs the current short position by more than twelve times. Cost to borrow is running at 0.36%, essentially free money for bears. Compared to the 52-week tightest availability reading of 11.8%, the current level indicates there is no structural pressure on shorts at all. Availability has tightened sharply from over 2,000% just two weeks ago — a sign that new borrowing demand is being placed — but the pool remains deep.
Options positioning tells a completely different story. The put/call ratio has dropped to 0.87, more than two standard deviations its 20-day average of 1.06. That is the most call-heavy options positioning has seen in the past year — the 52-week low on this measure is 0.47, and the stock is trending hard in that direction. Two weeks ago, the PCR was above 1.00 and broadly in line with its recent average. The shift to calls since then is sharp and fast. Options traders are not hedging into June earnings; they are taking the other side of the short sellers.
The Street remains cautious on valuation, even as options bulls emerge. Analyst targets have been cut consistently since March, with Seaport Global delivering the most dramatic move — a downgrade from Buy to Sell with a target slashed from $140 to $74 in early April. More recent cuts from Evercore ISI and Wells Fargo in mid-April kept the pressure on. The mean target now sits at $91.50 against a $83 close, implying modest upside, but the consensus carries only two positive ratings in the snapshot. The PE multiple has compressed almost two full turns over the past month to 12.5x, and the price-to-book ratio is below 1.0 at 0.98 — signalling the market is pricing LEN at below the value of its tangible assets. The EV/EBITDA multiple has also drifted lower over the same period.
The ownership picture adds one notable data point. Berkshire Hathaway added over three million shares in Q1 — a position increase of roughly 43% — bringing its stake to 4.2% of the company. That is a substantial vote of confidence from a famously patient holder, and it sits in sharp contrast to the short sellers rebuilding exposure this week. Stuart Miller, the executive chairman and largest individual holder, trimmed around 110,000 shares in early May, though his 9.8% stake remains enormous.
Peers moved broadly lower on the week. DHI fell nearly 6% and CCS dropped 8.7%, while LEN gave back 3.3% — a relatively contained move given the scale of those peer losses. The ORTEX short score has risen to 50.8 from 44.8 ten days ago, a steady climb that now places LEN at the midpoint of the short-pressure spectrum.
The June 12 print is now the fulcrum. Bears are positioned for further margin deterioration and weak closings data; options traders are betting the recent compression in the stock is overdone. Which side is reading the housing cycle correctly becomes the question to watch.
See the live data behind this article on ORTEX.
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