MDC Holdings, Inc. (NYSE:MDC)

TheGarcipian (89.05) Submitted: 10/17/2007 4:07:08 PM : Start Price: $35.88 MDC Score: +9.07

As of today (10/17/2007), MDC Holdings is not in as bad a position as other home builders (because, for one thing, they're one-step removed from the direct builders), but they are still precariously balanced and leaning towards a continued downwards slide. They carry a huge debt load ($1.1B) on a market cap of $1.8B, but with a Book Value ($42.90/shr) greater than the current stock price ($39.20/shr). I think the book value will slide along with the stock over the next 6 months, as their holdings (houses) get devalued and/or sold for much reduced prices in order to liquidate their inventory. Their EV/EBITDA ratio is pretty darned high (14.3) for a seller of houses, indicating that for the sale price of the entire company, a corporate raider wouldn't get much earnings out of this woodpile. Return on Equity and quarterly revenue & earnings growth are all negative, while Return on Assets (at 2.3%) has less gradient than my shed's roof. Debt-to-equity is better than others in this industry at 56% but that number isn't anything to be terribly proud of. It's good to see that inside investors hold 22.7% of the stock, but I think they're not going to be all that happy over the next 6 months.