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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Tradelite who wrote (145170)1/22/2002 2:48:37 PM
From: reaper  Read Replies (2) of 436258
 
<<Two differences--builders are making money (check earnings reports)>>

OK, I did

Cash from operations 1999-2001
note that < > means a NEGATIVE cash flow

Toll Brothers (TOL)
FY01 <$148.4mm>
FY00 <$16.9mm>
FY99 <$120.9mm>
over $1 billion of debt; over $2 billion of unsold inventory

Pulte (PHM)
FY00 $23.3mm
FY99 $15.1mm
FY98 <$105.5mm>
about $1 billion of debt; nearly $2 billion of unsold inventory
(note that Pulte market cap is $2.5 billion, so you are paying a mere 100x cash generation)

Centex (CTX)
FY01 <$1,413.3mm>
FY00 $861.6mm
FY99 <$257.1mm>
$3.5 billion debt; over $2 billion unsold inventory; over $2 billion residential mortgage loans receivable

I could go on and on. And I won't even get into how deeply a lot of these companies have gotten into mortgage origination and servicing, the questionable residual assets (from securitizations) some have on their balance sheets, or the off-balance sheet obligations many have.

I know I'm not a new era guy, but where I come from "making money" means taking in more cash than goes out the door. Ain't happening at any homebuilder that I know of, with the exception of Lennar (which by all accounts is a very well run business).

Oh, and I kind of lied above. I did not check their "earnings reports". I checked their financial statements.

Cheers
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