to view your mail
U.S. markets open in 1 hour 40 minutes
Hovnanian Enterprises, Inc. (HOV)
NYSE - NYSE Delayed Price. Currency in USD
Add to watchlist
At close: 4:00PM EDT
1,081 reactions on $HOV conversation
Sign in to post a message.
Mid-September thoughts on HOV........
Really good Q3, really good Q4 forecast. HOV says ~$665m revs and ~$27.5m adj profit, which would be less than last year (2019 Q4 ~$713m revs, ~$44m adj profit). Now, last Q4, HOV took a ~$42m loss on extinguishment of debt non-cash charge. Without that charge, HOV's TTM earnings are ~$50m, and with a current market cap ~$185m, their P/E is less than 4. Most homebuilders (including debt-laden BZH) have a P/E ~10-12.
If FY2021 is as profitable as it appears it may be, HOV will put the DTA on their balance sheet, allowing for more assets than liabilities. In turn, many institutional buyers (who currently hold only ~30% of HOV shares) will begin purchasing HOV shares again (most homebuilders have ~90+% shares held by institutions).
By my calculations, HOV only needs new home sales to remain >700-740k per year to be profitable. The dearth of new home sales from 2008-2019 should allow for such levels to be easily maintained in the coming 2-3 years.
HOV has only ~$180m debt due before FY2026. Any continued improvement in HOV's balance sheet should easily allow for future debt to be refinanced at lower interest rates.
I've said it before (look up my posts), but to me, HOV needs more communities. Their current backlog >3k homes is higher than in years when HOV had many, many more communities. I can only imagine what their backlog would be with ~150+ wholly owned communities. If HOV can grow community count and manage debt, their market cap should continue to appreciate.
So, what's my target price? Assuming ~$38m profit in FY2020 (likely higher though), put a 10x multiple on that and I come up with ~$60 per share. For FY 2021, I'll say HOV hits their target of $100m adjusted profit, and a 9x multiple would be ~$150 per share.
All this is my 2 cents of course.
9/4/2020---Excerpt from latest HOV Earnings report:
●Income from unconsolidated joint ventures was $5.7 million for the third quarter ended July 31, 2020 compared with $3.7 million in the fiscal 2019 third quarter. For the first nine months of fiscal 2020, income from unconsolidated joint ventures was $13.4 million compared with $20.6 million in the same period a year ago.
●Income before income taxes for the third quarter of fiscal 2020 was $16.2 million compared with a loss of $7.1 million in the third quarter of the prior fiscal year. For the first nine months of fiscal 2020, income before income taxes was $13.0 million compared with a loss of $39.1 million during the same period of fiscal 2019.
●Adjusted pretax income, which is income before income taxes, excluding land-related charges, joint venture write-downs and gain on extinguishment of debt, improved to $14.5 million in the third quarter of fiscal 2020 compared with a loss before these items of $4.8 million in the fiscal 2019 third quarter. For the nine months ended July 31, 2020, income before income taxes, excluding land-related charges, joint venture write-downs and gain on extinguishment of debt, was $5.8 million compared with a loss before these items of $34.6 million during the same period in fiscal 2019.
●Net income was $15.4 million, or $2.27 per common share, for the three months ended July 31, 2020 compared with a net loss of $7.6 million, or $1.27 per common share, in the third quarter of the previous fiscal year. For the first nine months of fiscal 2020, net income was $10.3 million, or $1.52 per common share, compared with a net loss of $40.3 million, or $6.76 per common share, in the same period during fiscal 2019.
I guess it's down because they sold so many more homes than they expected to that their community count declined?
This company is worth $100+ today.
these guys are well positioned issue only getting enough labor and material to build to demand not an easy issue but a problem they have not had for some time but all builders in same state
Why did it drop so much after good quarterly results recently?
I just bought some...I did some research and expect a larger than expected surprise based on California sales and guidance. But we'll see.
in latest presentation state they had a market cap of $4b I'll take half of that share price 300+, by the way they are right some of the other big builders should make an offer at 10x current cap , $2 billion , 10 bagger.
I can see 50 before year end prediction entirely possible, Edgar you made that backed with analysis. Holding thousands of shares from 14. HOV my dream maker.
Do you remember that HOV did a 1 for 25 "reverse" split not too long ago. So the stock is really just a tad over $1 buck pre-split. And, once upon a time in the past, it was a $70+ stock. So $5 a share (pre-split) wouldn't be that much compared to $70. And $5 would be $125 at today's post split prices.
So hang in there until you get $100 bucks or more. New home sales are soaring right now!!
I wonder how many times the stock will keep going back and forth from 5-25$
Buy HOVNP. 4.10 or better. Earnings will indicate postive news with debt service. Sept 2 announcement
barely positive on a significant beats; and the best performer of 30 holdings in my portfolio; pretty disappointing reaction, but pleased with the ER; might take a few more days to get real here.
It looks like pre-earnings excitement has already baked in any increase in value that the earnings report will indicate. Hard to see it going up from here in the short term.
30 has been broken
very good ER...will end the week +10%, today is just funky..not worried at all
More than a 5% price range today on no volume. This things a powder keg. It would be hard to overstate the potential for a huge move with quarterly earnings.
HOV expects next quarter to be even better than this quarter. The Best Is Yet To Come!
after hours up 1.43. 3rd qu will be good but 4th quarter will be overwhelming. remember sales are delayed about 6 months from demand which exploded May/June. had 3 homes built from the ground up 5-6 months all.
In quarterly earnings just this week.....
NVR beat, no guidance (they don't give guidance)
PHM beat and raised full year guidance
MTH crushed and raised full year guidance
At 74k NSA, new home sales for June is the highest for any month since May, 2007.
2020 New home sales outpacing 2019 through the same 6 months.
Jack advises "hang in there" on HOV. After its run from 5 to 19 since March. Hovnanian is just about the top Builder stock in volatility. It's eps are still 3 weeks away. COVID splurge of housing sales seems topped. and that was mostly from crowded to suburban. And HOV is mainly building in not only congested areas, but heavily on Florida's slowly flooding coast! I'd say..take your short-term gain..NOW! above 29.
Warren and Schumer urge student debt cancellation of up to $50,000 for all federal borrowers
Ford expanding Michigan factory for electric F-150
Yahoo Finance Video
These 3 states have the worst unemployment rates
Advertise With Us
© 2020 Verizon Media. All rights reserved.
About Our Ads
Discover new investment ideas by accessing unbiased, in-depth investment research