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Forestar Group Inc. Message Board

  • tightlinesnfreshtracks tightlinesnfreshtracks Oct 16, 2009 12:30 PM Flag

    Still Burning Cash

    The bulk non-core sale masked the fact these guys are still burning through 10M in cash from operations. Still bleeding bad...

    Anyone see any thing different? I am on the sidelines with capital have some house money still in the game.

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    • If you are looking for cash flow, real estate is not the place to be now. It's all about positioning themselves for an eventual real estate recovery. Of course, by the time you claerly see the recovery, companies like this are likely to have a much higher PPS. The stock action has become boring, but I feel comfortable holding it long-term.

      • 1 Reply to alegan04
      • Always good to here from you Algean. As I work in development on the PE side, I am well aware of forestar's holdings in Atlanta. I hear you on position in RE, but if they continue to burn the rate of cash they are burning versus preparing for the worst and hoping for the best. All they are doing is half ass working and burning your cash as an investor. Personally, I think Atlanta especially the burbs have multiple years in front of them where they should be focused on cost controls versus spending. The timber sale just masked the fact they continue to burn 10M a quarter. So yea, I care about cash flow. Don't expect them to make money right now, but don't expect them to burn my $$$ as an investor neither on nothing right now. As development is non-existent...

        I want to see some cost cutting versus just living off their balance sheet before I invest my money.

        Just my humble opinion and my investment strategies that have worked...Time will tell...I will continue to wait as deflation is still in serious effect and the ATL meltdown is just in its infancy...I had this sector/competitors pegged to take a look at in 2010 seriously after the capital markets become more clear. Just keeping up with DD so I am prepared to move when it is appropriate. I hear you on the higher price, but you got way more risk to the downside today than upside even if you where in at $12. Just my humble opinion...

 
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