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Comstock Holding Companies, Inc. Message Board

  • sm20505 sm20505 Aug 13, 2013 11:11 PM Flag

    Q2 not a good one

    the main problem is the gross margin. Q1 GM is 22.82%. Q2 only 19.74%. Now the company predicts break-even year for 2013, not returning to profitability.

    In 2003, revenue was $49 million and gross margin 25.39%. That resulted in $12.46 million gross profit and $6.8 million net profit. Now they will have $64 million 2013 revenue but cannot make a profit.

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    • LOUSY!

      Sentiment: Strong Sell

    • In 2003 they did not have joint ventures and unfavorable loans on their projects. The fact is that this company is in the beginning stages of a massive turnaround, no one was expecting them to be raking in tons of profits this year. If the sales trends continue and they begin new projects with better terms, the profits will follow. By the time you know they are going to be solidly profitable the stock will already be significantly higher. You have to get in while times are still rough and sit tight. If they wind up building condos at Reston Station metro, the company could easily be looking at 200 million+ revenue from that project alone, and the margin on that will be spectacular.

      Sentiment: Strong Buy

      • 2 Replies to roger7485
      • The whole home building sector hs been in downtrend since May and most in year low such as LEN, DHI, PHM, ... CHCI is hardly doing it alone. My prediction: it will fill the gap back to $1.50 level in the next 1-2 month. May have year end rally. I sold all my shares before earning release as I know that it will go down following the trend.

      • Roger is correct. The margins now are a result of unfavorable joint ventures and loans etc. taking on during the housing recession. The question now is simply can CHCI begin new projects with more favorable terms? The potential is there. The issue is one of execution and whether macroeconomic factors will help or hinder new projects. I tend to believe that real estate is in a multi-year uptrend, so CHCI should benefit enormously.

 
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1.14-0.01(-0.87%)Jul 28 3:17 PMEDT

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