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alstry (< 20)

Analysts SANDBAGGING Centex???



April 10, 2008 – Comments (5)

As this blog is written, current consensus estimate for CTX is a loss of $2.20 per share this quarter.  The low estimate is a loss of $3.70 per share.


There is a better chance of FloridaBuilder wearing no name shoes and taking a shih tzu for a walk than CTX only losing $2.20 per share.  As a matter of fact, it is likely CTX will lose over $8 per share and very possible over $10 per share.  How can that be?  How could CTX lose 4X to 5X MORE than a bunch of supposedly professional analysts and a little ole CAPs blogger get it right.

Remember, a bunch of these analysts work for the banks that actually make loans to HBs.  Don't ya  think they have access to information that gives them a clear picture of fundementals.  But, at CAPs, we have FloridaBuilder, our boots on the ground 24/7 RE reporter.  Hmmmmm.  A bank that actually makes loans and has hundreds of employees working in the area and is privy to the actual results of the builders or FloridaBuilder.


Well we ain't there yet, we will have to wait a few weeks for the actual results.  They could be shocking.  My ballpark guestimate of a guess based in in part that accuracy is impaired due to FloridaBuilder's current literary strike is that CTX will lose $8.40-$10.10 per share.


5 Comments – Post Your Own

#1) On April 10, 2008 at 8:37 AM, alstry (< 20) wrote:

Robert H. Schottenstein, Chief Executive Officer and President, commented, "Selling conditions in most of our markets remain difficult. We continue to focus on our predominantly defensive operating strategy and are making meaningful progress on a number of fronts. During the first quarter, we reduced our homebuilding bank borrowings from $115 million to $42 million, and we successfully amended our unsecured credit facility thereby providing us with additional financial flexibility. We are positioning M/I Homes for improved market conditions."

Maybe someone should tell management that market conditions are deteriorating and that the business should be prepared for deteriorating market conditions.  WTF is the Board of Directors thinking?  If you are preparing for conditions that don't exist, you could be really preparing for BANKRUPTCY!!!!!

MHO has less than $250 million in Backlog coming out of the Spring selling season.  It is operating out of 148 active communities.  For those that are mathematically challenged, that is about $1.5 million of backlog per community.  At a generous 5% margin, that is about $75K of margin in backlog per community.  That can't even pay the property taxes less the millions in other expenses each community faces.

I really do feel sorry for the homeowners that have already purchased homes in new can they depend developers that is preparing for improving market conditions when conditions are deteriorating rapidly. 

I have seen first hand what can happen when a developer abandons a project, it ain't pretty.

From this vantage point, it appears the mess is just the end of the summer, we could be seeing distress we have never faced before.

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#2) On April 10, 2008 at 8:46 AM, Capsperson wrote:

Thanks for saying what needed to be said !

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#3) On April 10, 2008 at 9:38 AM, TDRH (96.58) wrote:


I am with him as well, until he starts talking about technical bottoms and possible upside bounce and I don't listen, and end up with a handful of -100 scores.   Call it selective hearing-one day I hope to realize that I am the grasshopper.

I was checking out the top blogs the other day, I think he has like 8 of the top 10.

As for losses, I suppose it matters when they take their writedowns.

As for the homebuilding companies, I wonder if their executives will give back their bonuses from the boom years, similar to Uncle Sam giving back taxpayer money?

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#4) On April 10, 2008 at 9:38 AM, klemenv (96.84) wrote:

You and FB rocks.

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#5) On April 10, 2008 at 4:51 PM, Gtrinvestor (94.95) wrote:

The bottom does eventually have to hit someday, but unfortunately for our economy and the stock market, that day ain't here yet.  That being said, I am being a little more selective in my thumb-down ratings.  In particular, I've already gotten burned on BSC... I'm sure that won't be the last gov't backed buy-out (look for FMD to potentially have the gov't step in to guarantee student loans for example).

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