Thu, Jul. 30, 4:07 PM
Mon, Jun. 15, 8:25 AM
- “We’re not going to have 22 publicly traded companies that are significant enough in size to have good liquidity," says John Burns, who heads a homebuilding research firm, predicting more consolidation in the industry.
- Standard Pacific (NYSE:SPF) CEO Scott Stowell - who will be the chief of the combined company: “We’re out in front of what we think will be a wave of consolidation in our industry."
- The two builders have little in the way of overlap, reports the WSJ, as each has its largest operations where the other doesn't, and Standard Pacific is an upscale homebuilder (ASP of $478K), while Ryland (NYSE:RYL) focuses on those of lower cost (ASP of $333K).
- SPF +3% premarket
- Investor presentation and conference call webcast
- Previously: Homebuilders Standard Pacific, Ryland Group agree to merge (June 14)
- ETFs: XHB, ITB
Sun, Jun. 14, 10:24 PM
- California-based homebuilders Standard Pacific (NYSE:SPF) and Ryland Group (NYSE:RYL) announce a merger agreement that would form a single company that would own or control 74K home sites and have a market cap of $5.2B.
- The two companies say they will be building houses in 20 of the top 25 metro areas in the U.S. as a single company, and rank in the top five in market share in 15 of them; they say the merger should result in cost savings of $50M-$70M per year.
- SPF CEO Scott Stowell will become executive chairman of the combined company, while RYL CEO Larry Nicholson will be its CEO.
Tue, Jun. 9, 10:14 AM
- The usually sunny Ara Hovnanian found himself unable to put lipstick on his company's pig of a quarter and the stock is lower by 14.4% in early action (the conference call begins at 11 ET).
- Topping off the poor results, interest rates are back on the rise, with the 10-year Treasury yield hitting a new high for the year at 2.44%.
- The other homebuilders are acting as if HOV's issues are company-specific: Toll Brothers (TOL -0.2%), Lennar (LEN -0.2%), PulteGroup (PHM -0.6%), D.R. Horton (DHI -0.2%), KB Home (KBH -0.8%), Ryland (RYL -0.6%), Standard Pacific (SPF flat).
- ETFs: ITB -0.2%, XHB -0.3%
Fri, May 15, 12:18 PM
- The summer pattern for the builders is typically the opposite of the winter "hope trade," says Raymond James, noting the sector has underperformed the S&P 500 in 21 of the last 30 summers, with the average underperformance being 490 basis points.
- Not downgraded is WCI Communities (WCIC +1%), which remains a Strong Buy. "We see a special situation with one of the strongest growth stories in the industry, backed by a deep and highly valuable Florida land base, producing better-than-expected margins while trading at a deep discount (20%+ on most metrics) to its larger cap peers."
- Also not downgraded is D.R. Horton (DHI +0.4%) thanks to its exposure to first-time homebuyers.
- Downgraded, but still an Outperform is Toll Brothers (TOL +1.6%), thanks to the "unsurpassed quality" of its "remarkable land assets."
- Downgraded to Market Perform from Outperform: KB Home (KBH +1.8%), Lennar (LEN +0.1%), M.D.C. Holdings (MDC), PulteGroup (PHM +1.3%), Standard Pacific (SPF +0.5%), and Ryland (RYL +0.5%).
- Previously: Homebuilders downgraded across the board at Raymond James (May 15)
Thu, Apr. 30, 4:34 PM
- Q1 net income of $31.6M or $0.08 per share vs. $38.2M and $0.09 one year ago.
- Net new orders of 1,571 up 20%, up 31% in dollar terms. Monthly sales absorption rate of 2.6 homes per community up 5%. Cancellation rate of 11% vs. 21%.
- Backlogs of 2,310 up 15%, up 29% in dollar terms.
- 972 new home deliveries down 2%.
- ASP of $482K up 7%.
- Gross margin of 24.2% down 240 basis points. Operating margin of 10.1% down 330 bps.
- Conference call tomorrow at 12 ET
- Previously: Standard Pacific misses by $0.02, misses on revenue (April 30)
- SPF flat after hours
Thu, Apr. 30, 4:13 PM
Thu, Apr. 23, 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)
Wed, Apr. 22, 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)
Thu, Apr. 16, 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)
Tue, Mar. 24, 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)
Fri, Mar. 20, 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)
Tue, Feb. 24, 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%).
Mon, Feb. 23, 10:51 AM
- Existing home sales fell more than forecast in January, sliding to the lowest seasonally-adjusted annualized rate since April.
- Previously: Treasury yields head south following soft home sales report (Feb. 23)
- Compass Point throws in the towel on its Outperform calls on Standard Pacific (SPF -1.2%) and Beazer Homes (BZH -1.4%), downgrading both to Neutral.
- ETFs: ITB -0.7%, XHB -0.15%
- Toll Brothers (TOL -0.5%), Lennar (LEN -1%), Hovnanian (HOV -2.5%), PulteGroup (PHM -0.7%), Ryland (RYL -1.3%), D.R. Hoton (DHI -0.8%).
Thu, Feb. 19, 1:14 PM
- Rising demand driven by strong household formation in 2014 H2 should be tailwind, says the report, and the seven names targeted by the team give investors exposure to "move-up buyers."
- "Y/Y growth in average backlog prices was generally ahead of our assumptions in the most recent round of earnings reports, which suggests to us that the move-up buyer is the demographic where our builders can maintain or raise prices."
- PT changes (mostly thanks to boosted multiples): D.R. Horton (DHI +1.1%) to $28 from $23. Lennar (LEN +0.9%) to $44 from $38. Meritage (MTH -0.5%) to $53 from $42. PulteGroup (PHM +0.8%) to $27 from $23. Ryland (RYL +1.1%) to $53 from $45. Standard Pacific (SPF +0.7%) to $9 from $8. Tri Point Homes (TPH -0.2%) to $18 from $15.
Fri, Feb. 6, 3:05 PM
- With the 10-year Treasury yield ahead by 12 basis points to 1.94% and short-term interest rate futures moving quickly to price in one more rate hike this year, the homebuilder names are instead choosing to focus on the strongest 3-months of job growth in this country in nearly 20 years.
- Previously: Rate hike expectations to shift after big jobs report? (Feb. 6)
- The ITB is up 1.95% and the XHB - more weighted towards suppliers rather than homebuilders - is up 0.6%.
- Toll Brothers (TOL +0.9%), Lennar (LEN +3%), Hovnanian (HOV +1.7%), Ryland (RYL +1.7%), D.R. Horton (DHI +2.2%), KB Home (KBH +2.8%).
- Standard Pacific (SPF +5.7%) is the strongest of the bunch after beating Q4 estimates last night. Net new orders of 978 in Q4 rose 11% Y/Y, with the ASP up 10% to $491K.
- Previously: Standard Pacific beats by $0.01, beats on revenue (Feb. 5)
SPF vs. ETF Alternatives
Standard Pacific Corp is engaged in the business of constructing single-family attached and detached homes with operations in the metropolitan markets in California, Florida, Arizona, Texas, the Carolinas and Colorado.
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