DJ Hovnanian CEO: Frustrated With Market Reaction To 3Q EPS
"How in the hell am I suppose to do any more big insider sales when the stock is getting slammed today? I believe in this Co. so much I sold heavily the past 2 months to give the retail investor a chance to buy in."
By Christopher Scinta
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Hovnanian Enterprises Inc. (HOV) Chief Executive Ara Hovnanian said he was frustrated by the market's reaction to the company's fiscal third-quarter results.
The home builder exceeded its own guidance for the quarter ended July 31, but missed consensus analyst estimates, and its shares slid Thursday as a result. Recently, shares were off 7% to $57.20.
"We certainly feel a sense of frustration," the executive said on a conference call, noting the company has been working to give more and more accurate guidance, particularly one quarter out.
He said the company's results were good and its shares were already trading at an "anemic" price to earnings multiple.
In its press release reporting net income of $161.1 million, or $1.76 a share for the quarter, Hovnanian said sale price increases had moderated. However, the chief executive said that was a good thing and will keep the market sustainable.
"In general the markets are steady and healthy right now," he said.
(MORE TO FOLLOW) Dow Jones Newswires
September 08, 2005 12:05 ET (16:05 GMT)
Copyright (c) 2005 Dow Jones & Company, Inc.- - 12 05 PM EDT 09-08-05
So, you're saying its a buy at 2.57x book??? Explain yourself. First you say it was a buy when it was 'under book'.....now you change your philosophy and say you buy based on 'earnings'....because, of course, its now way overdone if someone like you were to base his purchase on book value.
This is typical of the longs. The rules change as these stocks become clearly overvalued.....but hey, maybe you're the one who's correct, "Its Different This Time"........housing isn't cyclical anymore, the illegal aliens will buy up all the excess supply, home prices aren't really overpriced, the hurricane will help HBs, interest rates will stay low forever, earnings will increase 20% a year into perpituity, blah, blah, blah..
By the way, if are as successful in stocks as you say, then you definitely would be taking something off the table. The most seasoned investors all say that even if we aren't at the top of the earnings cycle, we're damn close to it!
Price/Book is 2.57, but I buy on P/E versus growth, not book. You shorts are hopeless. You work with lies and distortions.
I made several million $ over the last 5 years with HBs, and am not selling.
Just listen to their conference call.
I take the CEO's comments as a giant read flag. It seems that classy well run companies like JNJ and MDT never mention their stock price. It is an unwritten code that stock price takes care of itself if you execute properly. You just don't talk about stock price.
Look at companies like Worlcom (Bernie Ebbers), Tyco (Dennis Kozlowski), Dynegy, Overstock.com, etc. that come out defending their stock prices and threatening short sellers. It always seems to be a big red flag saying, "get out now!!
Just run your biz. If you do a great job, then the shorts will get crushed.
I espcially liked the comment about the "amemic" price earnings multiple. This is homebuilding, what do you expect??
I remember when I first bought HOV in 2001 when the stock was trading slightly below book value.
The CEO complained then too about the stock price, I bought and the stock has gone up 10 times since then.
Next year HOV will charge .93 against earnings from goodwill writeoffs. They do not have to do this, 95% of all companies are not doing this. That shows how conservative they are.
So in reality, they expect to make about $9.00 per share before this non-cash charge.
What we are seeing is the real estate market normalizing to slower price increases. That is bullish, not bearish, because it will eventually silence the housing bubble talk.
Since I bought this stock, the bears have been very active most of that time, and it has been one of the best performer on the NYSE.
Shorts will lose a lot of money as time goes on. Short a stock with that growth and low P/E is lunacy.
>I espcially liked the comment about the "amemic" price earnings multiple. This is homebuilding, what do you expect??
Exactly! These bozo homebuilder CEOs still keep thinking that we are in some kind of new era where homebuilders are no longer cyclical, but instead are awarded the multiples of growth stocks. UFB!
This is all going to end badly ladies and gentleman. Believing that the old rules no longer apply is a classic signal of a bubble.