The Other Lennar: Lennar B Offers 10X The Voting Rights At 25% Off
Special Situations and Arbs • 39 Comments
Special Situations and Arbs • 39 Comments
May 15, 2015, 9:07 AM
- Possibly spooked by the rout in the bond market and what higher interest rates could mean for homebuilders, Raymond James pulls Outperform ratings and cuts price targets on a wide swath of the sector.
- Ryland Group (NYSE:RYL), Standard Pacific (NYSE:SPG), Pulte Group (NYSE:PHM), M.D.C. Holdings (NYSE:MDC), Lennar (NYSE:LEN), and KB Home (NYSE:KBH) are all cut to Market Perform, while Toll Brothers (NYSE:TOL) is cut to Outperform from Strong Buy. It's unclear if D.R. Horton was similarly downgraded, but its price target is cut to $29 from $31.
- It's been a rough month for the lot of them, with all (excepting M.D.C.) lower by anywhere from 7%-14% as long-term interest rates have shot higher.
- PHM is down 1.2% premarket
- ETFs: ITB, XHB
May 8, 2015, 11:59 AM
- The market is currently undervaluing Lennar's (LEN +2.4%) FivePoint Communities subsidiary, says Barclays, upgrading to Overweight with $53 price target from Equalweight and $45.
- FivePoint Communities website
- Following a two-day tour of FivePoint, the team at Barclays things the four large projects are "among the industry's most impressive land assets, and highlight the company's expertise in managing public-private partnerships, and navigating an extremely difficult and complicated path to entitling parcels."
- Barclays places a value on those four projects of $11.27 per share, "substantially more than we believe most analysts have assumed."
- Lennar's Rialto subsidiary should also be valued separately, says Barclays, since it represents a materially different stream of revenues and income than from traditional homebuilding.
Apr. 23, 2015, 10:17 AM
- PulteGroup earlier reported disappointing results which included slimming margins and muted price gains. The stock is lower by 8% in morning action.
- Minutes ago, HUD reported a far larger-than-expected slowdown in new home sales in March - with the South leading the retreat (gotta be the weather?).
- Toll Brothers (TOL -2.3%), Hovnanian (HOV -1.2%), Lennar (LEN -2.1%), Ryland (RYL -3%), D.R. Horton (DHI -3.4%), KB Home (KBH -3.5%), Beazer Homes (BZH -3%), Standard Pacific (SPF -2.8%).
- Previously: PulteGroup -7.8% as Q1 results disappoint (April 23)
- Previously: South leads big decline in new home sales (April 23)
Apr. 22, 2015, 10:52 AM
- D.R. Horton posted better-than-expected number for FQ2 (ended March 31), and calls the spring season so far a strong one. Management, however, slightly trimmed its guidance on operating margins for FQ3, and the stock is now lower by 4.8% on the session.
- Previously: Investors take profits after D.R. Horton beat (April 22)
- Lennar (LEN -0.8%), Ryland (RYL -0.9%), PulteGroup (PHM -1.8%), KB Home (KBH -0.9%), Toll Brothers (TOL -1.5%), Standard Pacific (SPF -1.2%)
- ETFs: ITB, XHB
- Previously: Treasury prices retreat after home sales number (April 22)
Apr. 21, 2015, 3:54 PM
- The REITs are down about 8% from their January highs while the homebuilders have posted gains, bringing the ratio of homebuilders to REITs to long-term resistance, says MKM Partners' Jonathan Krinsky, who suggests fading the move.
- Most vulnerable to tactical pullbacks are those homebuilders/suppliers showing the weakest relative strength: Beazer Homes (NYSE:BZH), Lennar (NYSE:LEN), Louisiana-Pacific (NYSE:LPX), Taylor Morrisn (NYSE:TMHC), Toll Brothers (NYSE:TOL), and TRI Pointe Homes (NYSE:TPH).
- The best long REIT ideas are those showing the best relative strength: AvalonBay (NYSE:AVB), Crown Castle (NYSE:CCI), Essex Property (NYSE:ESS), Extra Space Storage (NYSE:EXR), Federal Realty (NYSE:FRT), General Growth (NYSE:GGP), SL Green (NYSE:SLG), and UDR.
- Those REITs showing poor relative strength or to be avoided or sold: American Tower (NYSE:AMT), American Realty Capital (NASDAQ:ARCP), Brixmor (NYSE:BRX), Host Hotels (NYSE:HST), and Omega Healthcare (NYSE:OHI).
- Source: Barron's
Apr. 16, 2015, 11:06 AM
- Housing starts bounced just 2% to 926K in March following February's supposedly weather-related plunge. Expectations had been for a 1.05M starts in March. Gains in the northeast and midwest in March were offset by declines in the south and west.
- Toll Brothers (TOL -2.4%), Lennar (LEN -2.1%), Hovnanian (HOV -2.8%), PulteGroup (PHM -2%), Ryland (RYL -2.7%), D.R. Horton (DHI -2%), KB Home (KBH -1.9%), Standard Pacific (SPF -2.7%), NVR (NVR -1.3%).
- Previously: Lame rebound for housing starts (April 16)
- Previously: Declines in the south and west hold back housing starts (April 16)
Apr. 8, 2015, 4:37 PM
- Lennar (NYSE:LEN) declares $0.04/share quarterly dividend, in line with previous.
- Forward yield 0.31%
- Payable May 6; for shareholders of record April 22; ex-div April 20.
Apr. 6, 2015, 4:31 PM
- The Pavilion Property is a 190K square foot shopping center, and the Urstadt Biddle (NYSE:UBA) late last year won approval to change the zoning to allow residential apartments above ground level and restaurant uses. UBA was going to partner in the re-development, but after reconsideration thought an outright sale was the best course. Lennar (NYSE:LEN) is the buyer.
- The sale contract contains a number of contingencies, but the company expects closing near the end of fiscal 2015 or start of fiscal 2016.
- Urstadt Biddle notes the property was just a three-story department store prior to its purchase in 2002.
Mar. 24, 2015, 10:08 AM
- New home sales in February at a seasonally-adjusted annualized rate of 539K is the fastest pace in seven years. With January's revision up to 500K (from 481K), it's the fist time sales have hit 500K for two or more consecutive months since early 2008.
- The median sales price rose 2.6% to $275.5K, and inventory stands at 4.7 months of homes on the market at the current sales pace, down from 5.7 months in January.
- Homebuilder ETFs: ITB +1.1%, XHB +1.1%.
- Toll Brothers (TOL +1.3%), Hovnanian (HOV +2.9%), Pulte (PHM +1.8%), Ryland (RYL +1.5%), Lennar (LEN +1.7%), KB Home (KBH +2.4%), Standard Pacific (SPF +1.4%).
- Full report
- Previously: New home sales fly past expectations in February (March 24)
Mar. 20, 2015, 11:38 AM
- A good week for the homebuilders gets better after KB Home's FQ1 cruised through estimates, and the company said recently contracting profit margins are set to turn the other way for the rest of the year (the stock's up 7%).
- ITB +2.3%, XHB +1.6%
- Toll Brothers (TOL +3.2%), Hovnanian (HOV +2.5%), Lennar (LEN +3.6%), Pulte (PHM +2.8%), M/I Homes (MHO +3.6%), D.R. Horton (DHI +2.1%), Ryland (RYL +2.4%), Standard Pacific (SPF +2.8%).
- Previously: KB Home on the move after earnings beat, margin comments (March 20)
Mar. 19, 2015, 7:38 AM
- FQ1 (ended Feb. 28) income of $115M or $0.50 per share vs. $78.1M and $0.35 one year ago.
- Home deliveries of 4,302 up 19%% Y/Y/
- New orders of 5,287 homes up 18%; new order dollar value of $1.8B up 24%.
- Backlogs of 6,817 homes up 20%; dollar value of $2.4B up 24%.
- Homebuilding operating income of $207.6M up 28%. Gross margin on home sales of 23.1%. Operating margin of 11.7%.
- Financial services operating income of $15.5M vs. $4.5M. Rialto operating income of $4.6M vs. $2.6M.
- "Early signals from this year's spring selling season indicate that the housing market is improving, and disappointing single family starts and permits numbers should rebound shortly."
- Earnings call at 11 ET
- Previously: Lennar beats by $0.05, beats on revenue (March 19)
- LEN +2% premarket
Mar. 19, 2015, 6:03 AM
- Lennar (NYSE:LEN): FQ1 EPS of $0.50 beats by $0.05.
- Revenue of $1.64B (+20.6% Y/Y) beats by $140M.
Mar. 18, 2015, 5:30 PM
Mar. 9, 2015, 8:30 AM
- The team takes profits at Lennar (NYSE:LEN) - downgrading to Neutral from Buy after a 33% run higher over the last seven months, and moves the money into PulteGroup (NYSE:PHM) with an upgrade to Buy from Neutral. For its part, Pulte is higher by about 20% over the same time frame.
- LEN -0.7%, PHM +0.5% premarket
- Previously: Homebuilders upgraded at JMP Securities (March 9)
Mar. 5, 2015, 11:20 AM
- First-time homebuyer budgets (how much they're willing to spend) are up 24% vs. 2014, according to Bank of Montreal's (U.S.) homebuying report, and the expected down payment slips to 13% from 16% a year ago. 77% of those surveyed have made "lifestyle cutbacks" to save for a home vs. 72% in 2014.
- Turning to Texas and the effect of the energy crash, Susquehanna checks show the spring selling season is shaping up to be stronger than last year. The team visited entry-level offerings from D.R. Horton (NYSE:DHI), Pulte Group (NYSE:PHM), Lennar (NYSE:LEN), and Beazer (NYSE:BZH), and found things "surprisingly strong."
- The news supports management views of higher sales and margins, says Susquehanna, and many builders indicate price hikes of 3-5% in recent months given the strong demand. The team also notes getting a mortgage seems like less of an issue, labor is still tight, and rental costs are, in part, behind the boosted entry-level interest.
- ETFs: XHB, ITB
Feb. 24, 2015, 11:09 AM
- Toll Brothers cruised past FQ1 estimates and boosted guidance, and Meritage Homes reported big increases in new orders in January. Both of those names are ahead more than 3%.
- ETFs: ITB +1.85%, XHB +1.1%
- Others: Lennar (LEN +2.5%), PulteGroup (PHM +1.7%), Hovnanian (HOV +1.4%), Ryland (RYL +1.8%), KB Home (KBH +2%), Standard Pacific (SPF +3%), D.R. Horton (DHI +1.4%).
Lennar Corp. provides real estate related financial services, a commercial real estate investment, investment management and finance company through its Rialto segment and a developer of multifamily rental properties in select U.S. markets primarily through unconsolidated entities. The company... More
Sector: Industrial Goods
Industry: Residential Construction
Country: United States
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