Levitt Corpration (LEV) is a Fort Lauderdale, FL based homebuilder and real estate company that operates in the Southeast (Florida, North Carolina, South Carolina, Georgia). As of 12/31/06, the company had an inventory of 11,700 acres, 6900 of which were considered saleable (4100 in Florida, 2800 in South Carolina). The company's market cap is just north of $50 million, but a rather heavy debt load brings the enterprise value to about $650 million.
Like most homebuilders, Levitt has been crushed lately; from a 52 week high of $15.44, down to its current price $2.72. This company has truly taken a drubbing, as housing sector woes have worsened. Levitt reported a second quarter loss of $58.1 million, including a $63 million homebuilding inventory impairment charge.
It was an ugly quarter, as evidenced by these company reported "lowlights":
Second Quarter, 2007 Compared to Second Quarter, 2006
Total revenues of $127.8 million vs. $133.2 million
Net loss of $58.1 million vs. $737,000
Diluted loss per share of $2.93 vs. $0.04 per diluted share
SG&A as a percent of total revenue was 26.3% vs. 23.3%
Homes delivered (units) of 379 vs. 392
Gross orders (units) of 478 vs. 423
Gross orders (value) of $122.4 million vs. $119.6 million
Cancellations (units) of 187 vs. 91
Net orders (units) of 291 vs. 332
Homebuilding Division backlog (units) of 957 vs. 1,799
Homebuilding Division backlog (value) of $297.8 million vs. $609.2 million
Land Division third party backlog (value) of $29.0 million vs. $15.4 million
To add insult to injury, the January 2007 announced merger with BFC Corp was terminated last week, sending Levitt shares down 21%. Can it get any worse? Of course it can.
Bluegreen Corp (BXG)
But there is another side to this story. Levitt happens to own a 31% stake in resort and timeshare company Bluegreen Corp (BXG). At its current market cap of $281 million, that values Levitt's BXG stake at $87 million, at a time when Levitt's market cap is just over $50 million. Granted, an ownership stake this large would no doubt command a discount if Levitt decided to unload it. But if BXG's price can hold up, this might just put a support level beneath Levitt shares.
Proceed with caution here, though, Levitt has a relatively heavy debt load, and is operating in an industry given up for dead.
LEV/BXG 1-yr comparison chart