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TRI Pointe Group, Inc. Message Board

  • abcs.learning abcs.learning Jun 7, 2013 2:50 AM Flag

    Inaugural Message - TPH at $16.17 - 52 wk low

    It's possibly fitting that I, a shareholder in this stock, might be the first to post on the IPO's message board. No spammers yet. No "flooders of the Nile" who drown sites like this with so much garbage.

    And Tri-Pointe has gone straight down for a month, losing 22% from where it was just three weeks ago, down from $20.45 to $15.79, trading at about a $1.50 below its IPO day.

    So what do we have here? A builder with a consummate management team (the former executive staff of the former William Lyons homes); a company who has increased its developed lot count in some of the most lucrative geographies in CA (Silicon Valley, San Jose) by 500% in the last year (they plunged their IPO money into securing them - developed lots they had either optioned or made down payments on during 2011-2012). They have expanded into the Denver area, but they are primarily a leveraged investment in the recovering CA housing market. The company will grow its completion rate by over 100% per year for the next 2.5 years til they reach a 1,000 homes delivered a year.

    They build nice stuff too, in the $400K to $1.8 ML range, have no legacy issues (2006-2010), and I would compare them to a young Toll Brothers. Their ASPs are rising, their revenues are rising, their customer satisfaction is high, and they have a data-driven method for choosing neighborhoods they build in: job growth where there is insufficient housing.

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    • Thanks for the post. I bought this as an IPO (some at 17.00, some more around 18.00) but have been disappointed the last few weeks. I did write covered calls that made some money (have bought them back). I'll do the same if the stock gets close to 20 again. Despite your optimism, the way this stock has been acting, I don't see it getting much over 20 in the next few months.

      On the other hand, I bought some TMHC (Taylor Morrison Homes) as an IPO ($22.00). Wrote October calls with a strike price of 25 for $3.01. Although this seemed to me to be a weaker outfit, the stock has been performing better. No message board for this builder however.

      • 1 Reply to gladysz
      • Yes, all agreed. But maybe we can spend some time quietly corresponding before the "ruiners" show up.

        I've done my DD on these guys and like what I see. Their 200 pg SEC filing is really an eyeful. They are backed by the best-of-the-best for management; for funding (Starwood); and for data-driven consulting (John Burns Real Estate). They build homes in CA markets where there is strong demand, transportation throughways, and burgeoning job growth.

        TMHC is actually a much older, more established private outfit that went public. It is a "major" in the U.S. already, building almost 4,000 homes a year. TPH is a true IPO with a rocket-ship style growth rate, and I think management likes it like that. The CEO also said something on CNBC on IPO day that I thought was quite telling. He said that they would be using the proceeds of the IPO to "secure" developed lots - either through outright buys or options on both the lots they had rights to (options) and to secure new buys and options on new lots. "That will go straight to the bottom line", he said.

        I have read that the shorts have really piled in to this stock, which would explain the severe downward pressure since their first quarterly report a couple of weeks ago. But as I have seen over the last year - especially with KBH - large short interest can lead to sudden short-squeeze. It is a mystery to me why they would pick on TPH right out of the gate.

12.38-0.13(-1.04%)Oct 21 4:02 PMEDT