Homebuilder Sector: Waiting For KBH, LEN Results [Housing Tracker]

Seeking Alpha's Housing Tracker is a collection of housing-related excerpts from various sources, grouped by topic. Feel free to post any interesting links on the subject in the comments section below.

Master Overbuilder. “At the time of its last annual report, Toll Brothers (TOL) stated that it controlled nearly 60,000 lots, including more than 31,000 that were not currently under development… As of April 30… the aggregate price of its outstanding land purchase agreements… amounted to $1.8 billion… Toll could end up profiting… from widespread misery. With a relatively low debt load and one of the largest cash reserves in the industry—roughly $1.5B… Toll Brothers seems to hold a decent position compared with others in its field. (Rival Hovnanian, ranked sixth in closings, has $119.9 million in cash, and Meritage, ranked 12th in closings, has $115M.) While Toll has downsized some company divisions, he has kept his land-acquisition teams intact.” (Conde Nast Portfolio, Oct. 2008)

Update: Lennar Shrinks Loss; Margin Wider, Costs Cut. "Lennar Corp. (LEN) the Miami homebuilder, narrowed its fiscal third-quarter net loss on 53% lower revenue. For the quarter ended Aug. 31, the loss was $89 million, or $0.56/share, compared with $513.9M, or $3.25/share, in the year-earlier period. Revenue fell to $1.11 billion from $2.34B. A survey of analysts by FactSet Research produced consensus estimates of a loss of $0.55/share on $1.3B of revenue. The company widened its adjusted gross-profit margin on home sales by 4 percentage points from a year earlier to 18%, and halved its selling, general and administrative expense." (MarketWatch, Sept. 23)

On West Side, Developer Has Action Aplenty. Ohio: “Land developer Joe Allen might be making a little less money off the lots he sells these days, but builders have snapped up more than 60 of his West Side parcels so far in 2008… He has sold 40 sites this year in his Blue Meadows subdivision, a 90-lot Ryan Homes (NVR) development… in Colerain Township… And in Delhi Township, Allen has just four of 60 lots left at Victory View, a moderately priced Ryan Homes subdivision.” (Business Courier of Cincinnati, Sept. 22) 

Lennar Sees Spike in Put Volume Ahead of Earnings. “Lennar is expected to post a third-quarter loss of $0.52/share. [Still] a vast improvement over last year's loss of $3.25/share… The company has missed expectations in 2 of the past 4 reporting periods by an average of 114%. Options players appear to be betting on a continuation of LEN's poor fundamental performance, as the group is piling into puts ahead of the event. Some 2,095 puts have traded so far today, outpacing the stock's average daily put volume by more than 5 to 1 and placing LEN on today's Intraday Volume Explosion List.” (Schaeffer Research, Sept. 22) 

The Week In Preview: A Bottom For The Housing Sector? “Investors [are] looking for any sign that the housing sector has bottomed. Analysts anticipate KB Home (KBH) and Lennar Corp. will report [this week] that they narrowed their losses in the most recent quarter… KB Home's losses in the past few quarters have been deeper than expected… Analysts continue to recommend holding KB Home... While Lennar also has tended in the past few quarters to miss expectations, [they] managed a positive surprise in Q1’08.” (Blogging Stocks, Sept. 21)

Construction Begins On First Of 3 Parks. California: “Workers have started construction on a city park to serve the Stoneridge Ranch community. The approximately 2-acre neighborhood park is being built in Beazer Homes' (BZH) Golden Fields housing tract off Eucalyptus Avenue. Beazer Homes agreed to build the park in lieu of paying the city-development impact fees to build other facilities, city Park Projects Coordinator Tony Hetherman said.” (Press Enterprise, Sept. 21)

KB Here for Long Haul, Says New Chief. Arizona: “KB Homes’ revenue for H1’08 fell to just about half as much as H1’07, according to financial statements. In Tucson, the builder suffered a setback when a development partner in Marana's Saguaro Springs backed out of the project last year, effectively putting the 2,462-home development on hold.” (Red Orbit, Sept. 20) 

Triple Top Breakouts Featuring Market Mover M/I Homes Inc. (MHO).  “Shares of Schottenstein Homes broke out above $23 and have climbed today on above average volume.  The 50-day moving average is approximately parallel and above the 200-day moving average.  RSI is neutral and trending upward.  MACD has been very strong since late August, with the indicator showing bullish and steady buying.” (Trans World News, Sept. 20) 

Lennar To Hold Great American Dream Home Sale This Weekend. Las Vegas: “Lennar is inviting all prospective homebuyers to "Live the American Dream" Sept. 20 and 21 at their premiere Great American Dream Home Sale, where buyers can take advantage of dream pricing, dream financing through Universal American Mortgage Co. and dream inventory, including 23 special showcase homes with upgraded landscaping and designer interior finishes.” (Press Release, Sept. 20) 

Housing Crisis Puts Condos At Risk. “The real estate market crash has led to changes in ownership in three unfinished condominium projects that city officials have long considered catalysts for Escondido's downtown redevelopment. The 4.5-acre Paramount property… has been sold by Texas-based D.R. Horton (DHI)… to Lyon Capital Ventures. The county assessor's office recorded the sale price… as $4.4 million – about 25% of the $17.5M Horton paid for it in 2005… Next to the Paramount is another condominium project that D.R. Horton sold to Lyon at the same time… for $1.14M– about 40% of the $3M a Horton subsidiary paid for the property in 2005.” (Sign On San Diego, Sept. 20)

                                                               

Get Seeking Alpha's housing market coverage by email -- it's free and takes only seconds to sign up.

Comments

[Pete Bertine:]

Time to start shorting TOL and LEN

2008 Sep 23 08:31 AM

[Responsibility:]

To encourage people to be responsible, we should have tax penalty and special points for future loans on load defaulters and tax incentive to people who keep their mortgages, to those who take on new mortgages, and to those who increase their mortgages, similar to tax on big cars and incentives for small/hybrid cars. Please spread this if you agree so that the politicians will do something.

2008 Sep 23 02:20 PM

[JohnKing:]

So TOL is in the land speculation business now.

2008 Oct 07 06:09 PM