NVR CEO Sells Shares Again [Housing Tracker]

Homebuilder Stocks

NVR Chairman Sells Shares. “The chairman of homebuilder and mortgage banker NVR Inc. (NVR) sold 18,598 shares of common stock, according to a SEC filing Friday. In a Form 4 filed with the SEC, Dwight C. Schar reported he sold the shares last Thursday for $544.61 apiece. Insiders file Form 4s with the SEC to report transactions in their companies' shares. [Note: This is the third share sale for NVR’s CEO this month.- Ed.] (Forbes, May 27th)

Lennar Plans Are Tough Sell in San Francisco. “In 1999, Lennar Corp. (LEN) began negotiations… to develop 770 acres, the largest undeveloped site San Francisco… Next week city voters [will] decide whether to approve… Lennar's development plan for the southeastern San Francisco neighborhood… The company has agreed to pay the city a nominal amount for the site that includes the former Hunters Point Navy shipyard and Candlestick Point. In exchange, the city requires that Lennar allocate 400 acres for park and open space, a site for the San Francisco 49ers' new football stadium… and thousands of homes for low- and moderate-income residents. Lennar estimates that such stipulations will cost about $1.2 billion over the 10-year project.” (WSJ, May 27th)

Avatar Gets B+ On Big Builder Report Card. Florida: “Avatar Holdings Inc. [is] one of just two homebuilders to receive strong results in Big Builder magazine's Public Builder Report Card. Avatar received a B+, beating out 15 other publicly held national builders. The report, [based on] financials from 2007, shows Avatar reported $2.22 EPS in 2007 and had cash of $192.3 million. The company reported 780 closings, a 63% year-over-year decrease, and a backlog of 147 homes… a 73% year-over-year drop. Avatar: The company's low cost basis for its long-owned land, diversification into commercial and industrial real estate, and ability to maintain low levels of debt have helped Avatar "weather the downturn.” (Orlando Business Journal, May 28th)

Mon Ousted from TOUSA CEO Post. “SEC filing: Antonio B. Mon, president and CEO of the financially troubled TOUSA (TOA)for nearly six years, will relinquish both titles within the next 30 days. He will be be replaced by John R. Boken, the company's chief restructuring officer since January, when the company filed for bankruptcy protection from its creditors under Chapter 11… Mon will remain with the company, keeping his title as executive vice-chairman of the board, for no longer than the end of the year… The company offered no reasons for Mon's termination in its documents.” (Big Builder Online, May 27th)

Housing Skid Leads to Exodus of Builders. “The housing slump is downsizing San Diego County's home-building industry… “Centex (CTX), KB Home (KBH), K. Hovnanian (HOV), William Lyon, Richmond American, Pulte (PHM)– all have closed local offices, and pretty much every other builder has reduced staff,” said real estate analyst Peter Dennehy… Experts say the problem goes deeper than the slowing sales trend. There simply is less for builders to do as the county runs out of land designated for residential development. In the future, residential construction will consist mainly of urban infill projects and attached housing. That's why many of the departing builders probably won't be back, even when the housing slump ends.” (Sign on San Diego, May 27th)

Cramer's 'Stop Trading!': Homebuilders Alive. “The banks and the homebuilders won't go down, Jim Cramer said on CNBC's "Stop Trading!" segment Tuesday. "These companies continue to attract investors," he said. He pointed to Standard Pacific's (SPF) ability to raise capital today. Cramer said this news is broadly bullish for the homebuilders, who may receive further capital infusions from hedge funds. "If you're emboldened, you'll come and buy another homebuilder," he said. He said National City (NCC) had shown similar ability to raise capital earlier this year.” (The Street, May 27th)

Standard Pacific Plans Major Recapitalization. “SEC 8-K filing: Standard Pacific announced that private equity firm MatlinPatterson Global Advisors was recapitalizing the company through an unusual structure that includes an equity infusion, a rights offering, and a debt exchange vehicle. Standard Pacific chairman, CEO and president Jeffrey V. Peterson: "It's equity in the sense that it's enhancing our balance sheet with conversion of the debt that further reduces our leverage. It provides us with significant financial flexibility and a lot of funding for future growth opportunities. I would characterize it as our ability to go on the offense as opposed to being on the defense." The proposal must be approved by shareholders.” (Big Builder Online, May 27th)

Developers Ask For More Time To Build Central Park Complex. Florida: “In September, the developers of the stalled Eden condo project off Palmetto Park Road asked the [Boca Raton] City Council for an extension on its building permits. Two weeks ago, the council OK'd a building permit extension for a project called The Summit on South Federal Highway. On Wednesday, the council takes up another similar request. This time it's Lennar Corp.'s Central Park townhouse project on Congress Avenue. Before Eden, Deputy City Manager George Brown said he can't recall a single building permit extension request that reached the City Council in at least 20 years.” (Sun Sentinel, May 27th)

Meritage Homes Rises on Home Sales Data. “Meritage Homes Corp (MTH) stock hit its 52-week high of 35.55 last May and its 52-week low of 7.04 in January. The stock has been in a sideways pattern since… January, [but] has been moving higher today after a government report showed… gains in new home sales. Technical indicators for the stock are bullish and deteriorating while S&P gives MTH a neutral 3 STARS (out of 5) hold rating. For a hedged play on this stock, consider a September bull-put credit spread below the $10 range. MTH stock could fall up to 41.3% before expiration and this position would still be profitable.” (Market Intelligence Center, May 27th)

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Comments

[jimsep]

"Housing skid leads to exodus of builders?" It couldn't happen to a better bunch. They have to rank with the US auto industry and the US banking industry as the worst managed in this country, all of which have become an albatross.