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Dave Kranzler

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  • Alacer Gold: Too Cheap To Ignore [View article]
    I've got several mining stock ideas I think will do well. One of them has mine-ready property in Turkey but needs to find a partner with deep pockets to finance building the mine or buy the property outright:

    September is the strongest month of the year for gold.
    Aug 29 07:27 PM | Likes Like |Link to Comment
  • Exeter Resource's New PEA Makes It A Strong Buy [View article]
    I can take XRA investors and those curious about XRA even deeper - and I've spent several hours on the phone and in person with management, including the founder of the company and the co-chairman - both of whom own a lot of stock:
    Aug 29 11:07 AM | Likes Like |Link to Comment
  • Is Obsolete Home Price Data Relevant? [View article]
    The direction of the DJUSHB since mid-May 2013 thru today - especially vs. the action in the SPX - tells us that my analysis of the housing market is as right as predicting the sun will rise in the east, even on a cloudy day:

    My trading account with my short-sell ideas also tells us I'm right. My body of work also contains a detailed analysis which shows that Case Shiller has serious flaws.
    Aug 28 09:33 AM | Likes Like |Link to Comment
  • July New Home Sales Reflect Deteriorating Housing Market [View article]
    And the DJUSHB is RED with interest rates lower, SPX futures hitting 2,000 and home prices reportedly higher again. I just don't get it - can someone please explain?
    Aug 26 10:03 AM | Likes Like |Link to Comment
  • July New Home Sales Reflect Deteriorating Housing Market [View article]
    SPX opens at new record high, DJUSHB opens....RED? Qu'est-ce que c'est?
    Aug 26 09:50 AM | Likes Like |Link to Comment
  • Drowning In Unsold New Homes? [View article]
    Finally, someone else who understands how to look at the homebuilder segment. Not only are inventories jumping up big time at every single homebuilder, but cancellation rates are climbing.

    For point of reference, and you can confirm this on the Census Bureau website. the CB does NOT back cancelled contracts out of its numbers (sales are recorded when a contract cancels). This alone overstates the numbers, the SAAR calculus compounds the error..

    There a good analysis here:
    Aug 26 09:25 AM | 2 Likes Like |Link to Comment
  • XHB: Housing Stock Traders Just Got A Gift [View article]
    The DJUSHB opened the day green and closed red. It went red right after the new home sales report hit the tape and the traders/investors who dig deeply into the numbers understood why it was not a good report. There's a comprehensive analysis here:

    Inventories are rising, interest rates are dropping, etc etc and yet the homebuilders close down on a day when the SPX hit another new all time high. My analysis explains why...
    Aug 26 09:22 AM | Likes Like |Link to Comment
  • Single-Family New Home Sales Jump 12%, Market Back In Balance [View article]
    You are using the statistically manipulated, I mean seasonally adjusted ANNUALIZED rate to do your comps. Are you aware that the Census Bureau does NOT back out cancelled contracts (sales are recorded when a contract is signed) when they cancel? I bet you did not know that. Can you tell me the average cancellation rate for new homes? I doubt it. It's over 20%. If we look at the June to July NOT ADJUSTED numbers which is provided in the CB report, sales dropped 7.5%.

    There's a much more thorough analysis here:

    If your analysis is valid, you have to explain why the DJ Home Construction Index was RED yesterday as the SPX was hitting another new all time high AND interest rates were falling...
    Aug 26 09:19 AM | Likes Like |Link to Comment
  • July New Home Sales Reflect Deteriorating Housing Market [View article]
    Again, explain the DJUSHB's 13% decline in the last 18 months vs a 20% gain for the SPX. This is a stock market in which a Company like Twitch, with almost no meaningful revenues, goes from being valued at like $100 million to $1 billion in just 18 months. Yet, amazingly, the homebuilder stocks are falling like zombies with barely pulse...
    Aug 25 09:26 PM | Likes Like |Link to Comment
  • July New Home Sales Reflect Deteriorating Housing Market [View article]
    FYI, from where are you deriving your 5 p/e? I'm sure you must be aware that in Q4 Ryland included $4 per tax of a tax benefit that which was due to a reversal of deferred taxes. This is a completely non-cash event and the actual ability to gain any real economic value from this is 100% dependent on the company generating higher earnings down the road. It's a classic earnings management game.

    If you calculate the TTM net income per share, which I have to believe that you've done, the TTM EPS ex-questionable non-cash tax benefit was $3.84. Of course RYL made if difficult to find the Q4 numbers stripped out, but there it was buried in the 10K, which I'm sure you knew.

    Ipso facto, RYL's TTM p/e ratio is 9.5x. That's still on the high side for a homebuilder - BUT I will go thru the exercise when I have time of figuring out how much interest expense per share is being hidden thru the magic powers of capitalizing interest. I'm sure RYL's real p/e is low teens.
    Aug 25 09:22 PM | 2 Likes Like |Link to Comment
  • July New Home Sales Reflect Deteriorating Housing Market [View article]
    What numbers are you looking at? Have you looked at the 10-Q? Most of the gross profit margin was generated from price increases. Unit sales were up on 2.5% y/y. Their operating income margin was FLAT. It was actually down this year vs. last if you include interest expense. Did you happen to notice how much interest expense they recorded?

    ZERO. Yet they have $1.4 billion in debt. Huh? Per the footnotes to the 10Q, which I trust you read thru, Ryland decided to capitalize any interest not included in COGS. Classic earnings manipulation. I bet you forgot to scan the cash flow from operations statement. Negative $105 million in cash generated from operations. This feature is endemic to the homebuilding industry. Negative operating cash flow. Worse if you include interest that was capitalized rather than expensed.
    Aug 25 09:12 PM | 3 Likes Like |Link to Comment
  • July New Home Sales Reflect Deteriorating Housing Market [View article]
    Not sure what your point is. If I look at the "Not seasonally adjusted, NOT annualized number" for July in the report, it shows 37k home sales. Now, per my perusal of every homebuilder 10-Q, the average cancellation rate for new home sales is over 20%. New home sales are based on contract signings, NOT closings. Apply a 20% cancellation rate to today's not statistically massaged number and you get rougly 29k actual closings. But if you review the Census Bureau's accounting policy - and I'm sure you've done that - they don't include cancellations in their revisions. We don't know what the true number that is ex-revisions the CB presents on statistically manipulate annualized rate basis. It's not possible to know that. Using the SAAR revisions in one's analysis is not quality analysis because of the unreliability of that number.

    That's fine if you want to present that statistically manipulated, I mean "seasonally adjusted" annualized statistic, but it's no more of value than a Hobson's Choice, is it?

    Of course, you've never addressed the issue of the DJUSHB horrifically and negatively diverging, diverging egregiously, from the SPX over the last 18 months, have you?

    It's really easy to pick your sandbox when everything you've ever "published" on SA is comments stuck in the bowels of the work of others...
    Aug 25 08:49 PM | 4 Likes Like |Link to Comment
  • July New Home Sales Reflect Deteriorating Housing Market [View article]
    There's a lot of factors. Institutional demand, which never really hit new homes segments, is done. In the entire metro Denver area that inventory of existing high end homes is going thru the roof. The only ones that move are the ones that take down their price quite a bit.

    The high end inventory is going to squash the price levels of everything below it as many of these people look to unload.

    As it is said, often brown smelly stuff rolls downhill....
    Aug 25 03:55 PM | 3 Likes Like |Link to Comment
  • July New Home Sales Reflect Deteriorating Housing Market [View article]
    lol. Yes but DJUSHB is down 13% since its May 2013 peak - SPX is up 20% in the same time period.

    Imagine what happens to these stocks when the stock market turns...
    Aug 25 03:52 PM | 2 Likes Like |Link to Comment
  • The Gold To Silver Ratio Could Be Peaking [View article]
    Something very ominous is occurring in silver. The Comex open interest is hovering around all-time highs, there has been a serious drain of physical silver from the Shanghai Futures Exchange (roughly 85% of the physical stock has been removed this year), the premium for the front month on the SFE has been 8% above the LBMA fix and has been in backwardation, India has been importing a record amount on a monthly basis...I smell desperation:
    Aug 25 09:18 AM | 4 Likes Like |Link to Comment