Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Tradelite who wrote (145170)	1/22/2002 1:32:40 PM
From: At_The_Ask	Respond to of 436258

Thats true, but I think the issue is does that growth continue at this pace? And does inflation continue to make housing prices rise?

To: Tradelite who wrote (145170)	1/22/2002 2:06:47 PM
From: LLCF	Read Replies (1) \| Respond to of 436258

<Two differences--builders are making money (check earnings reports), and there actually is a market for what they create. > Yep, every cyclical is making money hand over fist at their peaks.... and have losses as far as the eye can see at their bottoms. DAK

To: Tradelite who wrote (145170)	1/22/2002 2:48:37 PM
From: reaper	Read Replies (2) \| Respond to 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