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Summary

  • Engaged in all aspects of homebuilding.
  • Focused on the design, construction and sale of single-family detached and attached homes in major metropolitan markets.
  • One of the top 5 fastest growing homebuilders by total revenue.

Based in Greenwood Village, CO, Century Communities (NYSE:CCS) scheduled a $110 million IPO on the NYSE with a market capitalization of $526 million at a price range midpoint of $24.50 for Wednesday, June 18, 2014.

The full IPO calendar is available at IPOpremium

SEC Documents

Manager, Joint managers: FBR Capital Markets, Deutsche Bank, J.P. Morgan

Co-Managers: Zelman Partners LLC, Builder Advisor Group

End of lockup (180 days): Monday, December 15, 2014

End of 25-day quiet period: Monday, July 14, 2014

Summary

CCS is engaged in all aspects of homebuilding, including land acquisition and development, entitlements, and the acquisition, development, construction, marketing, sale and management of various residential projects in major metropolitan markets in Colorado, and, more recently, in the greater Austin and San Antonio, Texas and Las Vegas, Nevada metropolitan areas.

Valuation

Glossary

Valuation Ratios

Mrkt Cap (MM)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

annualizing Q1 '14 proforma

Century Communities

$527

2.0

28.0

1.4

1.4

21%

Compare

Sorted by P/E

LGI Homes (NASDAQ:LGIH)

$391

1.3

21.3

2.3

2.5

William Lyon Homes (NYSE:WLH)

$827

1.4

23.8

1.9

2.0

Century Communities

$527

2.0

28.0

1.4

1.4

Tri Pointe Homes (NYSE:TPH)

$518

1.8

30.1

1.6

1.6

The New Home Company (NYSE:NWHM)

$214

2.1

33.4

1.5

1.5

Taylor Morrison Home (NYSE:TMHC)

$2,660

1.3

60.5

6.3

6.3

WCI Communities (NYSE:WCIC)

$500

1.7

83.3

1.2

1.3

For the five days ended June 12, the segment stock results are mixed: 3 up and 3 down.

(click to enlarge)

Conclusion
The rating on CCS is positive.

To put the conclusions and observations in context, the following is reorganized, edited and summarized from the full S-1 referenced above.

Business

CCS is engaged in all aspects of homebuilding, including land acquisition and development, entitlements, and the acquisition, development, construction, marketing, sale and management of various residential projects in major metropolitan markets in Colorado, and, more recently, in the greater Austin and San Antonio, Texas and Las Vegas, Nevada metropolitan areas.

Strategy

CCS's business strategy is focused on the design, construction and sale of single-family detached and attached homes in major metropolitan markets, including in Colorado, Texas, and Nevada, and CCS's planned entry into other markets in the Western United States.

Product line variety

CCS offers a wide variety of product lines that enable it to meet the specific needs of each of its core markets (Denver, Fort Collins, and Colorado Springs, Colorado, Austin and San Antonio, Texas, and Las Vegas, Nevada), which CCS believes provides it with a balanced portfolio and an opportunity to increase market share.

Since its formation, CCS has delivered over 2,700 homes for total revenues of $750 million.

One of top 5 fastest growing by revenue

In 2013, CCS was one of the top 50 largest homebuilders in the United States by total revenue (as ranked among public and private companies by Builder Magazine) and one of the top 5 fastest growing homebuilders by total revenue.

Profitable every year

CCS has been profitable every year since its founding, including throughout the recent economic downturn.

Since 2008, CCS's home sales revenue has more than tripled even as some homebuilders experienced significant revenue contraction.

During that same period, many of CCS's competitors were forced to exit the business or undergo significant restructuring.

Results

For the three months ended March 31, 2014, CCS delivered 128 homes for total home sales revenue of $49.7 million, up 101% from $24.7 million over the three months ended March 31, 2013, and for the year ended December 31, 2013, CCS delivered 448 homes for total home sales revenue of $171.1 million, up 78.2% from $96 million over the year ended December 31, 2012.

Backlog

The dollar amount of CCS's backlog of homes sold but not closed as of March 31, 2014, December 31, 2013 and December 31, 2012 was $122.3 million, $103.3 million and $51.6 million, respectively.

Dividend Policy

No dividends are planned.

Competition

CCS competes with large national and regional homebuilding companies and with smaller local homebuilders for land, financing, raw materials and skilled management and labor resources.

5% stockholders

Dale Francescon 16.5%

Robert J. Francescon 16.5%

Luxor Capital Group, LP 9.2%

BlueMountain Capital Management LLC 8.6%

Claren Road Asset Management, LLC 5.7%

Use of proceeds

CCS expects to net $89 million from its IPO. Proceeds are allocated as follows:

Primarily for the acquisition and development of land and, to the extent not used for the acquisition and development of land, CCS may also use net proceeds for general corporate purposes, including development, home construction and other related purposes.

Pending these uses, CCS intends to invest the net proceeds from this offering in a variety of capital preservation investments, including short-term, interest-bearing investment grade securities, money market accounts, certificates of deposit and direct or guaranteed obligations of the U.S. government.

Disclaimer: This CCS IPO report is based on a reading and analysis of CCS's S-1 filing, which can be found here, and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.

Source: IPO Preview: Century Communities