Lies and Analysts' Lies
First analysts valued public HBs at price times earnings. When earnings were gone then analysts started using price to book value.
Yesterday, CTX reported it sold a portfolio of land on the books for $528(let's not even address that CTX paid over $900 million for the land) million for $161 million. For those that can't subtract, that is about a $367 million dollar loss or about $3 per share.
Yes, there was a tax refund but it will be offset by a reductin of a tax asset on the balance sheet.
No where in CTX press release does it mention the $3 dollar loss and.or a $3 dollar reduction in bookvalue. The analysts KNOW this, and as a result, should have adjusted their valuation models by AT LEAST $3 dollars per share.
CTX's land was sold by a well shopped auction. It sets a value for land. In addition, other large deals have closed recently at similar valuations. An established market price has been set for land. If CTX and the analysts valued CTX's remaining land at this fair market value.....CTX would have a NEGATIVE bookvalue and be practially insolvent. Other builders would be in a similar boat.
Today CHCI auditors issued it a going concern warning. What do you think would happen to CTX and other public builders if they or the analysts simply fairly valued the assets on the books?