Brookfield Homes CEO Buying Stock (BHS)

From Insider Score: The chief executive officer of Brookfield Homes (BHS) is helping move his company's stock off its lows, disclosing his third buy in recent days this morning.

President & CEO Ian Cockwell has purchased 32.5K shares in a range of $41.19 to $42.28 since May 5th. Cockwell's last buy came yesterday, when he picked up 10K shares at $42.20, upping his stake in the company to 610K shares. Director Robert Ferchat also got in on the action, buying 1.65K shares at $42.36 on May 8th, raising his holdings to 4.65K shares in the process.

Homebuilder BHS went public in 2003, spinning off from Brookfield Asset Management (BAM), an asset management company formerly known as Brascan Corporation. BAM still owns a 51.5% stake in BHS, which last October bought back 3M shares, or about 10% of its outstanding share count, at $55.00 per share (the self-tender offer was oversubscribed by more than 23M shares). Excluding the self-tender, BHS bought back more than $33.8M in stock in 2005, and the company announced another $50M stock repurchase program in December 2005. Before Ferchat stepped up, Cockwell was the only previous inside buyer at BHS, having bought stock in December 2005 at $47.66 to $49.36, and again in March at $46.43 to $48.55.

Shares of BHS fell to a 52-week low of $39.65 on May 3rd, the same day that the company reported first-quarter results during the trading session. BHS reported earnings of $19M, flat from a year ago, though EPS grew from 60 cents to 68 cents due to the aforementioned buybacks and tender offer. Total revenue fell about -6% to $143M, while housing revenue dropped -14% to $122M. Despite the top-line drop, housing margins improved from 29% to 31%. BHS said it closed on 30 fewer units compared to the same quarter a year ago, and the average selling price of its homes decreased from $645K to $634K.

BHS, which operates primarily in four California markets (San Francisco, Los Angeles, San Diego, and Sacramento) and the Washington, D.C. area, increased its semi-annual dividend from 16 cents per share to 20 cents per share, payable on June 30th to shareholders of record on June 15th. The company, however, lowered its FY2006 earnings guidance, saying it now sees EPS of $7.20 to $7.60, down from an earlier forecast of $7.60 to $8.20. The guidance was the culprit for the stock's fall, moving it well off its October 2005, all-time high of $56.40. This morning, however, BHS is gapping about 4.5% higher on Cockwell's continued buying.