Pulte Homes, Inc. (PHM)

Shorting all the 1 star home builders I have room for.

Stagflation will gut the homebuilders. Unemployment will deplete the buyers and inflation will limit available credit.

Pulte Home has the system to deliver a home on time. From ground breaking to punch lis, Pulte completes a home in about 50 - 55 days. I know because I bought one and they gave me the date we were to close, and guess what? Pulte was dead on time! I have never dealt with a homebuilder that did that.

Centex is a company they bought because Pulte was running out of dirt to build homes on. Centex owns a lot of dirt but doesn't have the assembly line home building skills Pulte perfected, and it is a good marriage I feel will reward patient shareholders.

This is also a baby boomer play. Pulte is the best of breed in active adult living communities, and bought Del Webb. Pulte has needed some time to learn how to deal with the retirement crowd but they've figured it out.

When I bought my home I was annoyed the sales person kept telling me "no," everytime I asked if I could pay for a personal upgrade. However, looking at it from an owner's point of view, Pulte eliminates 3 days of waiting for buyers to choose amenities. The time saved gives Pulte the advantage of controlling the manufacturing and eliminating the variables that slows down cash coming in - buyers taking time to decide.

I am a Pulte homeowner and shareholder, willing to take the long road for Pulte and Centex to figure out the best way to merge their operations. I understand Centex owns a lot of dirt in areas like Arizona, New Mexico, and Pacific Northwest' all desire able destinations for aging baby boomers looking for a home in the country, with fellow aging hippies.

Pulte continues to win J.D. Powers owner satisfaction awards before the merger, and after. So, while the numbers are horrible the future appears bright. If you are a true contrarian who wants to own a company responsive to their home owners, Pulte is the builder for you.

While shopping in Northern, CA for a new construction home, my wife and I always gravitated to the Pulte floor plans. They are open, filled with light, and appear to be designed with the woman of the house in mind. We bought in Georgetown, TX, about 40 miles north of Austin. It is a great community and neighbors care about each other. This is the hippie commune that finally came together.

Buy Pulte while it is cheap. They will get their mojo back on track, once the transitional growing pains are worked out. Remember, we aren't getting any younger!

11.85 by Nov 1st

Homebuilders have a long way to go before they're profitable again. Pulte will probably survive but survivalists ain't pretty.

With the next down-leg in the housing market now beginning, and the next big down-leg in the stock market due to begin any week now, it's time to bring this one out, dust it off and short it for some more easy money. PHM has actually been outpacing the S&P in recent months, so it should beat it even better on the way down.

PHM Has a solid history of strong earnings misses.

Housing has not bottomed. Lots more of foreclosures to hit the market. Joblessness will persist. Interest rates likely to be higher.

it'll be months to years before homebuilders recover. not sure if this company will survive that long.

At the beginning of 09' Pulte had a 3.2 billion dollar debt load, with over 1 billion coming due in the next 5 years and was hemorrhaging cash. Meanwhile, Centex had a 3.3 billion dollar debt load, with over 1.5 billion coming due in the next five years and was also bleeding cash. So what did they decide to do? Take a flying leap into each others arms and create a massive, debt-riddled, cash-burning example of everything that was wrong with the housing bust. Congratulations! Owe, and I'm sure all of that shadow inventory the banks are keeping off the market will work wonders for the homebuilders in the coming years. Yay homebuilders!

PHM has a too high valuation compared to its sales potential. It is also one of the most loss making companies.

The mega-homebuilder merger is retarded. Are they trying to become to big too fail? This is like the Minyanville skit about Chrysler merging with Fiat... two turkeys coming together to form an eagle. The economy will recover when we go back to the age of the apartment and we stop giving banks all our money. Having a home will become more of a upper middle-class luxury than an asset.

Since PHM’s merger with CTX will result in the creation of the largest home builder in the US - and insofar as we expect to see
increased M&A activity across many industries as credit conditions improve while valuations remain low - we took a closer look at
the PHM/CTX transaction. Conditions in the homebuilding market are as bad as they've ever been, obviously; and 2009 industry
revenues could easily fall to levels representing half of 2007 sales. Therefore, attempting to model sales growth, margins or asset
turns for the combined PHM entity would be useless. However, the new PHM will own a geographically and end-product
diversified portfolio of properties against a moderately-leveraged capital structure. Both companies have taken impairment charges
totaling something north of 40% of original book - and it seems reasonable to assume future impairments would be modest by this
scale barring an additional cataclysmic decline in property and home prices. Over the last several horrific years for the home
builders, both companies have generated a significant 'deferred tax asset' on their balance sheets. PHM cannot avail itself of CTX’s
DTAs for five years after the transaction closes.
Using PHM management guidance that the company should generate positive operating cash flow next year, and taking into account
the ample pro-forma cash available to meet near-term debt maturities, we value the combined entities at 1.0x adjusted tangible
book value (tangible book - net cash use in 2009 (essentially debt service) + the combined DTAs – a PV adjustment to CTX’s TBV
(5 years at 10%)) which equals ~$14.50 / share. We further discount this result by 20% as a margin of safety to arrive at our FV of
$11.50/share.
We have no rating on the stock currently; however, should the stock decline below $9.50 or so, we would consider circling back to
this analysis for further action.

Good Luck!
AlphaPuppy

Has lots of land. Is blessed with an intelligent CEO who hasn't bought into that "land is worthless" crap. A TOL it's not, but as long as they hold on to the land, they should beat S&P hands down.

Foolish. FB

Watch stock prices jump as the housing now begins its' recovery

Looking for this market to start turning around in the next year. Well positioned companies will be able to ride this up.

Too much land at yesterday's price

land prices have fallen farther than I thought, I see UE reaching 12% by 2011... Pulte has too much land and will not participate in the biggest fleecing of banks in the history of the US. Focus on builders with low land positions