Replies to post #51936 on Savvy Trades and Investments

[abh3vt]

Agreed, cliff. This is selling by those who are pricing in a contraction coming in 2019-2020. There is no sign of any problem with CCS in the current numbers. I thought it was a great report: backlog way up, net new orders strong (even adjusting for acquisitions), pretax margins higher y/y. The analysts here are much too conservative with their eps numbers, and I think the company will earn close to 4.57/share in FY18 (GAAP).

The bearish case would say that FV is only 7 - 7.5x that number because 2019 will be as good as it gets....i guess.

Frustrating, because the growth is very strong at present and fear of slowdown is high because of rising rates and a hint of a slowing in mid Q2 for several homebuilders (which CCS said it did not feel)

ASP of units in backlog is coming down, but that is because the homebuilder they acquired (Wade Jurney) sells much cheaper homes than the average CCS community. Profit margins are very similar, however.

[researcher59]

CCS - the call was overall very positive, perhaps the only negative being the slight downtrend in gross margins - 23% Q1, 22% Q2 and guiding for 20% to 22% going forward -

conf call transcript -

Historically, for the past several quarters we have been forecasting a range of 20% to 21% and then our deliveries were coming in with margin in excess of -- better than 23% in the first quarter, better than 22% in the second quarter. As we look at backlog today, there is a lot of things we got to take into account. We do have price increases coming through there will be a certain level of mix that will be impacting those numbers. But we think over the next couple of quarters as we delivered today's backlog, a range of 20% to 22% for our adjusted gross margin is reasonable.