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Strategies & Market Trends : Value Investing

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From: E_K_S	11/6/2013 10:22:24 PM
	of 78594

OT - Not sure it's a true Value Buy but maybe a GARP play. LGI Homes (LGIH) Initial Public Offering LGIH - New IPO to price tomorrow Here is a link to the filing IPO. Take note of pg -10-, the ownership % and pg -14- the 2013 Unaudited Pro Forma Financial Information. Therefore I assume these numbers represent the total entity which earned $1.31/share x 46% (% allocated to stock offering) or $0.60/share. That implies a PE of $14.00/$0.60 (proposed IPO price) or 24PE. Sales appear to be growing at 22% from 2012 to 2013 For comparison, Paul Senior suggested MDC Holdings Inc. (MDC) another home builder. This one has a forward PE of 15. Therefore, even at an IPO price offering at $14.00/share, LGIV is no bargain but probably fairly priced where the PE equals their growth rate. It's the combined sales concept (that includes the packaged financing) that present to me the value proposition. EKS

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