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Beazer Homes USA Inc. Message Board

  • Alex1444 Alex1444 Aug 24, 2002 1:02 PM Flag

    Homebuilder PE update

    Here's an update on the PE ratios of the 14 major (market cap over $500 million) publicly held homebuilders. As of the market close on Friday, August 23.

    Symbol, PE

    BZH...6.50
    MDC..7.68
    RYL...7.98
    DHI....8.04
    PHM...8.10
    CTX...8.19
    KBH...8.25
    MTH...8.27
    SPF....8.43
    MHO..8.44
    LEN....8.47
    TOL....8.75
    NVR..10.24
    HOV..10.69

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    • Given today's "scared chick driven" homebuilder stock price collapse, it's time again to update on the PE ratios of the 15 major (market cap over $400 million) publicly held homebuilders (free standing, not "factory built" or "mobile homes", not condo towers, etc.). As of the market close on Thursday, November 7, 2002.

      Symbol, PE

      BZH...5.82
      MDC...6.19
      RYL....6.49
      PHM...6.63
      DHI....6.75
      CTX....6.81
      KBH....6.91
      TOL....6.97
      MHO...7.24
      MTH....7.36
      SPF.....7.44
      TOUS..7.48
      LEN....7.75
      NVR....9.46
      HOV..10.03

      Median PE on this group is 6.97. If BZH simply matched the median PE of the group, it would currently trade at $74.85/share (which would be more than a 19% increase from the current price of $62.54/share). And I personally believe that the homebuilders as a group are undervalued, that the median PE will be going higher than the current 6.97, which is about one fourth the average PE on the S&P 500. (As of the close Wednesday 11/6/02, S&P 500 PE = 29, DJIA PE = 21)

      Boilerplate: Above information is believed to be accurate, but be sure to check it for yourselves, before assuming accuracy!

    • Alex: rather than just repeating the same list, why not update it hourly?
      Since you're going to post it so often, updating it makes perfect sense. As price changes occur, and earnings (like BZH's) are reported, the list becomes stale & outdated.
      I am sure that a lot of the day traders here (mostly longs, of course) depend on this info to make their trades.
      I think maybe BZH is now out of place because of its earnings. Also, I think you should put DJIA PE in it also, to underscore the fact that not only is BZH cheap relative to the HBs; it is also cheap relative to the market.
      Other cheap stocks you could have put in include CNC, which was 1.5x earnings before it got delisted. And I think there are about a dozen others w/ PEs under 2. For grins, youcould even put in a few high PE stocks (you know the risky type- MSFT, WMT, and other high risk, high PE stocks like GE, etc.).
      GL to all.Tomorrow is day 1 of the BZH crash.

    • Once again, so many posts here by those wacky short sellers, that my weekly PE update is "buried". So here's another update on the PE ratios of the 15 major (market cap over $400 million) publicly held homebuilders (free standing, not "factory built" or "mobile homes", not condo towers, etc.). As of the market close on Wednesday, November 6, 2002.

      Symbol, PE

      BZH....6.31
      MDC...6.78
      RYL....7.13
      PHM...7.13
      CTX....7.27
      KBH....7.33
      TOL....7.48
      DHI....7.51
      TOUS..7.56
      MHO...7.83
      SPF.....8.04
      LEN....8.19
      MTH....8.38
      NVR..10.10
      HOV..11.39

      Median PE on this group is 7.51. If BZH simply matched the median PE of the group, it would currently trade at $80.65/share (which would be a 19% increase from the current price of $67.80/share). And I personally believe that the homebuilders as a group are undervalued, that the median PE will be going higher than the current 7.51, which far less than half the average PE of the S&P 500 and other major indexes.

      In my opinion, and particularly considering BZH's just reported (this week) strong earnings, strong October orders, and increased guidance for fiscal 2003, BZH is currently clearly a "best buy" of the homebuilders as one considers the PE ratios, growth outlook, price/sales, price/book, etc. vs. the other homebuilders. As I said, it would take a 19% increase in the price of BZH just to match the median PE of the 15 large publicly traded homebuilders. A 19% gain is nothing to sneeze at, and that's simply what could be gained if the homebuilder group sat still - while BZH moved up to a median PE within it.

      However, I furhter believe the entire homebuilding group is greatly undervalued, especially given this week's developments (50 basis point Fed rate cut, Republican sweep). So we could see a 19% move up (to the median) on top of whatever general move up the homebuilder group might make.

      Boilerplate: Above information is believed to be accurate, but be sure to check it for yourselves, before assuming accuracy!

    • Whoops, that should be for stock prices "as of the market close (regular hours) Tuesday, Nov. 5" (not Monday, Nov 5.)

    • Since BZH now has 12 month trailing earnings of $10.74/share, I thought it would be a good time to give another update on the PE ratios of the 15 major (market cap over $400 million) publicly held homebuilders (free standing, not "factory built" or "mobile homes", not condo towers, etc.). As of the market close on Monday, November 5, 2002.

      Symbol, PE

      BZH....6.19
      MDC...6.62
      RYL....6.88
      PHM...6.95
      CTX....7.14
      KBH....7.20
      DHI....7.23
      TOL....7.28
      MHO...7.72
      SPF.....7.88
      TOUS..7.90
      LEN....8.00
      MTH....8.25
      NVR..10.29
      HOV..11.22

      Median PE on this group is 7.28. If BZH simply matched the median PE of the group, it would currently trade at $78.18/share (which would be more than a 17% increase from the current rice of $66.45/share). And I personally believe that the homebuilders as a group are undervalued, that the median PE will be going higher than the current 7.28, which far less than half the average PE of the S&P 500 and other major indexes.

      IN OTHER WORDS, BZH HAS A LOT OF PE ROOM TO MOVE UP! It would be $78.18 just if it matched the median homebuilder PE, and that's after a bad day for homebuilder stocks overall. And just think if BZH could get a multiple similar to HOV, or NVR, or MTH, etc. OR similar to the S&P 500 - now THAT'S a concept.

      Above information is believed to be accurate, but be sure to check it for yourselves, before assuming accuracy!

    • Since Jmny has overloaded this board with messages, my prior PE update is now buried. So I'll post another update on the PE ratios of the 15 major (market cap over $400 million) publicly held homebuilders (free standing, not "factory built" or "mobile homes", not condo towers, etc.). As of the market close on Monday, November 4, 2002. Don't be scared by BZH's current PE, it is NOT a sign of the devil.

      Symbol, PE

      BZH...6.66
      MDC...6.73
      PHM...7.03
      RYL....7.18
      CTX....7.22
      DHI....7.28
      TOL....7.29
      KBH....7.35
      MHO...7.75
      SPF.....7.98
      LEN....8.02
      TOUS..8.11
      MTH....8.48
      NVR..10.26
      HOV..11.48

      Median PE on this group is 7.35. If BZH simply matched the median PE of the group, it would currently trade at $75.11/share (which would be more than a 10% increase from the current rice of $68.10/share). And I personally believe that the homebuilders as a group are undervalued, that the median PE will be going higher than the current 7.35, which far less than half the average PE of the S&P 500 and other major indexes.

      Above information is believed to be accurate, but be sure to check it for yourselves, before assuming accuracy!

    • Here's another update on the PE ratios of the 14 major (market cap over $400 million) publicly held homebuilders (free standing, not "factory built" or "mobile homes", not condo towers, etc.). As of the market close on Friday, November 1, 2002. Note that I have added the stock TOUS to this update, as it meets the above qualifications.

      Symbol, PE

      BZH....6.61
      MDC...6.63
      PHM...6.98
      CTX....7.08
      RYL....7.16
      TOL....7.16
      KBH....7.27
      DHI....7.34
      MHO...7.75
      SPF....7.84
      LEN....8.02
      TOUS..8.12
      MTH...8.26
      NVR..10.05
      HOV..11.33

      Median PE on this group is 7.34. If BZH simply matched the median PE of the group, it would currently trade at $75.01/share (which would be more than an 11% increase from the current rice of $67.51/share). And I personally believe that the homebuilders as a group are undervalued, that the median PE will be going higher than the current 7.34, which far less than half the average PE of the S&P 500 and other major indexes.

      Above information is believed to be accurate, but be sure to check it for yourselves, before assuming accuracy!

    • "I agree with all that but why do you think money will rotate to those crappy techs? I don't get that part."

      Are you watching this market closely? Two trains running, one north and one south. Pick your direction and hop on board.

      http://finance.yahoo.com/q?d=c&c=tol+qqq&k=c1&t=5d&s=bzh&a=v&p=s&l=on&z=m&q=l&y=
      on


      Caution, do not stand in front of train!

    • I really don't care if the market never recognizes that HB's are undervalued. As long as the sales and profits keep going up at say 20% per year, which they have done for a long time now, if the market continues to price them with a p/e in the 6-8 range, I'll still make 20% on my investment.

      In fact he HB industry is a far cry from what it was 10 years ago, and I believe that within a few years, the market will recognize that it is much more stable (ie less cyclical), and will price it accordingly. Then I'll make 100% on my investment, either way is fine with me!

      Incidentally I don't believe that anyone has enough market power to manipulate the price of these stocks in a significant manner over anything other than a very brief period of time.

    • Your observation is correct, but your reasoning or understanding is wrong. BZH shot up and then swung back down and eventually finished higher because this stock and all of the HBers stock are market followers not market leaders. The news on Friday should have underpinned the price, yet BZH et al acted very weak. BZH followed the DOW up and down on the whim of the specialist. He is bolstering the price. Once they feel it is in their better interest to do so they will let it drop like a stone. Read once a significant amount of the short interest dries up or once a big player steps in a sells on every rally. As for the market acting on memory, you can bet on it. You probably do the same with every day purchases. You knw when you are paying too much for something based on experience, don't you?

      Analysts work with fundamentals. They are the same people who have lost billions in pension funds. If they were following the trends they may have been able to shift their funds prior to the massive losses. I believe one has to use all the tools available in order to get so understanding of their target. I believe that common sense should also play an important role in an investment strategy. Getting cought up in the numbers is foolish. Besides the HBers never traded at the evaluations most of you pumpers have been stating. Wrong industry model.

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