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PulteGroup, Inc. Message Board

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  • johnmg47 johnmg47 Feb 11, 2011 5:24 PM Flag

    NY Times Article

    I wonder that myself. I only realized some of this stuff after the fact. I'm really tired of the way this dog continually underperforms - almost every day - relative to peers. It all began on November 3. Other homebuilders went sideways and this one went straight down. Underperformance by almost 35% since then, and with some of the building materials stocks, even more. My thought was that once business returned to normal the underperformance would become "catch up", but it hasn't happened. PHM never seems to get its head up above water. It under-reacts to good news and over-reacts to bad news.

    The problem has to be with the management and the lack of confidence that institutional investors have with them. Why would this one stock be singled out to trade differently from ALL the others? It looks like Bill Pulte gave the entire company over to Dugas and this one single guy doesn't have the necessary imagination to turn the company around the corner. A 35% relative underperformance to every peer in the industry is a grade of F for management in my opinion -whether Mr. Pulte or Mr. Dugas.

    They need to do something radical and new. A new CEO wouldn't have any qualms about dumping what's left of Centex because he wouldn't have to make excuses for why he bought it in the first place. What were they thinking? Nearly a billion dollars in goodwill flushed down a toilet! 85% of the acquisition written off. There's no special thing that Centex had prior to the purchase (except a lot of debt), no special homebuilding technology or patented style of home that Pulte couldn't have developed themselves. And trained personnel or builders with experience? A dime a dozen after the crash. I have no idea why they bought this company. They got NOTHING from it that I can see, except a lot of land of dubious value.

    So yeah...I regret this, but who knows, maybe something good will happen for Pulte? I hope so. They need a FRESH start, and that's why I mentioned that thing about moving their HQ out of the Detroit area. That has been a depressed manufacturing and housing market for the better part of 20 years. The growth areas are where people want to live - especially young people - not just cheap areas because no one wants to live there. Sure Detroit is cheap - but how about the crime, poor schools, and lack of jobs? Would you go there?

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