Ticonderoga on Homebuilding & Building Products: The Final Walk-Through: 1Q Homebuilder Round-Up
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Price: $55.37 +1.67%
Rating Summary:
4 Buy, 24 Hold, 7 Sell
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Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
4 Buy, 24 Hold, 7 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Ticonderoga on Homebuilding & Building Products: The Final Walk-Through: 1Q Homebuilder Round-Up by Stephen East
Ticonderoga's East said, "This report is a comparative look at quarterly results from our Homebuilder coverage. Charts include operating performance, financial results and equity valuation. We note that KB Home (NYSE: KBH), Lennar (NYSE: LEN) and Toll Bros. (NYSE: TOL) are on non-calendar quarters, which may distort the comparative process."
The first quarter of 2011 brought significant distortions to the builders’ results, as all builders except TOL (and to a lesser degree, PulteGroup (NYSE: PHM)) caught the negative flipside of last year’s tax credit impact. While most builders were primarily impacted by the tax credit this quarter, we believe its effects will distort comparative results for the rest of this year, setting up 2012 as the truly comparable period of analysis. Regardless of comparability, this quarter was extremely difficult for the group, as only one builder (NVR, Inc (NYSE: NVR)) showed operating profitability. Generally, the 2Q results should improve as much stronger volumes allow better cost absorptions. Nevertheless, we plough through this quarter’s results, as it provides a roadmap for the next few quarters."
"Unit Orders results took the brunt of the tax credit comparison, down an average of 15.9% for the group, while Orders Dollars were down 12.3%. The best performers on units were TOL and PHM, as the two posted the only growth, up 7.2% and 0.6%, respectively. Both have significant business that was not driven by the tax credit last year. The worst results were from KBH and MDC Holding (NYSE: MDC), producing 31.9% and 24.3% declines, respectively. Orders Pricing offset some of KBH’s volume declines, as they saw pricing up 15.3%, significantly above the group’s 3.2% increase. Despite all the news on falling pricing, builders continue to see pricing improve."
Ticonderoga's East said, "This report is a comparative look at quarterly results from our Homebuilder coverage. Charts include operating performance, financial results and equity valuation. We note that KB Home (NYSE: KBH), Lennar (NYSE: LEN) and Toll Bros. (NYSE: TOL) are on non-calendar quarters, which may distort the comparative process."
The first quarter of 2011 brought significant distortions to the builders’ results, as all builders except TOL (and to a lesser degree, PulteGroup (NYSE: PHM)) caught the negative flipside of last year’s tax credit impact. While most builders were primarily impacted by the tax credit this quarter, we believe its effects will distort comparative results for the rest of this year, setting up 2012 as the truly comparable period of analysis. Regardless of comparability, this quarter was extremely difficult for the group, as only one builder (NVR, Inc (NYSE: NVR)) showed operating profitability. Generally, the 2Q results should improve as much stronger volumes allow better cost absorptions. Nevertheless, we plough through this quarter’s results, as it provides a roadmap for the next few quarters."
"Unit Orders results took the brunt of the tax credit comparison, down an average of 15.9% for the group, while Orders Dollars were down 12.3%. The best performers on units were TOL and PHM, as the two posted the only growth, up 7.2% and 0.6%, respectively. Both have significant business that was not driven by the tax credit last year. The worst results were from KBH and MDC Holding (NYSE: MDC), producing 31.9% and 24.3% declines, respectively. Orders Pricing offset some of KBH’s volume declines, as they saw pricing up 15.3%, significantly above the group’s 3.2% increase. Despite all the news on falling pricing, builders continue to see pricing improve."
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