Replies to post #89146 on Savvy Trades and Investments

[bbotcs]

cliffvb: Homebuilders

My three are LEN, PHM, and TMHC. The homebuilders need to send vans to the border to pick up workers, because that is their big problem--labor.
Lumber prices have retreated, I hear, but those costs are passed on to the buyer. Labor shortages are everywhere, and it is a big mess.

Three is my limit. After U digest the cc, if U feel that DHI should be substituted for one of the above, I'm all ears.

[researcher59]

TPH had a nice beat yesterday morning - the homebuilders are rallying this morning, maybe starting to breakout of the slump they've been in since early May.

I'm looking forward to seeing numerous earnings reports next week.

My largest sector holdings are CCS and MHO.

briefing 7/22 am -

TRI Pointe Homes beats by $0.18, beats on revs (20.72 ) :
Reports Q2 (Jun) earnings of $1.00 per share, $0.18 better than the S&P Capital IQ Consensus of $0.82; revenues rose 31.6% year/year to $1.01 bln vs the $0.99 bln S&P Capital IQ Consensus.
For the third quarter of 2021, the Company anticipates delivering between 1,450 and 1,550 homes at an average sales price between $620,000 and $630,000. The Company expects its homebuilding gross margin percentage will be in the range of 23.5% to 24.5% for the third quarter of 2021 and anticipates its SG&A expense as a percentage of home sales revenue will be in the range of 9.5% to 10.0%. Lastly, the Company expects its effective tax rate for the third quarter of 2021 will be approximately 25.0%.
For the full year, the Company expects to open approximately 70 new communities and end the year with between 120 and 130 active selling communities. In addition, the Company anticipates delivering between 6,000 and 6,300 homes at an average sales price between $625,000 and $635,000. The Company expects homebuilding gross margin percentage to be in the range of 23.5% to 24.5% for the full year and anticipates its SG&A expense as a percentage of home sales revenue will be in the range of 9.8% to 10.3%. Finally, the Company expects its effective tax rate for the full year to be approximately 25%.

[researcher59]

MHO (58.54) reports EPS of $3.58 for Q2, way ahead of analyst estimates for $2.49 -

For the second quarter, pre-tax income increased 97% to a record $141.3 million and net income increased 97% to $107.6 million, or $3.58 per diluted share. This compares to pre-tax income of $71.7 million and net income of $54.5 million, or $1.89 per diluted share, for the second quarter of 2020. For the six months ended June 30, 2021, net income increased 123% to $192.5 million, or $6.43 per diluted share, compared to $86.3 million, or $2.98 per diluted share, for the same period of 2020.

Homes delivered in 2021's second quarter increased 23% to 2,258. This compares to 1,835 homes delivered in 2020's second quarter. Homes delivered for the six months ended June 30, 2021 increased 28% to 4,277 from 2020's deliveries of 3,330. New contracts for the second quarter of 2021 were 2,267 compared to 2,261 in 2020. For the first six months of 2021, new contracts increased 24% to 5,376 compared to 4,350 in 2020. Homes in backlog at June 30, 2021 had a total sales value of $2.5 billion, a 71% increase from a year ago. Backlog units at June 30, 2021 increased 49% to 5,488 homes, with an average sales price of $454,000. At June 30, 2020, backlog sales value was $1.5 billion, with backlog units of 3,691 and an average sales price of $396,000. M/I Homes had 175 active communities at June 30, 2021 compared to 220 communities at June 30, 2020. The Company's cancellation rate was 7% in the second quarter of 2021 compared to 14% in the second quarter of 2020.

The Company also announced that its Board of Directors has approved a $100 million share repurchase authorization, replacing its existing $50 million share repurchase authorization. From August 14, 2018 through July 27, 2021, the Company repurchased approximately 1.4 million shares for an aggregate purchase price of $32.8 million.

Robert H. Schottenstein, Chief Executive Officer and President, commented, "We had a record-setting second quarter highlighted by a 97% increase in net income, a 23% increase in homes delivered, a 35% increase in revenue, and a return on equity of 27%. Our gross margins were very strong, improving 320 basis points over last year to 25.1% and our overhead expense ratio improved by 110 basis points to 10.4%. As a result, our pre-tax income percentage improved to 14.7% from 10.0% in last year's second quarter. We set all-time quarterly records in backlog units and sales value, with sales value rising to $2.5 billion – a 71% increase from a year-ago. Demand for new homes continues to be very strong. Despite our community count being down throughout the quarter, and significantly limiting sales in the majority of our communities, we were pleased to set a record for second quarter new contracts selling 2,267 homes.

Mr. Schottenstein continued, "We ended the quarter with record-high shareholders' equity of $1.5 billion, an increase of 34% from 2020's second quarter, book value of $50 per share, cash of $372 million, no borrowings on our $550 million credit facility, and a homebuilding debt to capital ratio of 31%. During the quarter, we also extended the maturity of our credit facility to July 2025 and raised our commitment amount to $550 million. In addition, our Board of Directors approved a new share repurchase authorization under which the Company may purchase up to $100 million of our common shares. This share repurchase authorization reflects the strength of our business and our commitment to creating long-term shareholder value. We have significant operating momentum and are poised to continue delivering strong results."