Standard Pacific Corp. (SPF)

SPF had the opportunity to buy TOA assets for nothing... zilcho... through the bankruptcy courts... yet it appears this isn't going to come to fruition....

you cannot buy assets cheaper than through bankruptcy... this is a big tell....

and why aren't the other publics buying the assets of TOA? Because they weren't positioned to do it like SPF/MP... plus, the other publics will buy assets piecemeal.. so there is an unwillingness to take all the assets of TOA

One cannot equate other publics inability and unwillingness to buying all of TOAs assets the same way as SPF.....

I would close this pick to an outperform if SPF closed on TOA

this will be the first home builder to go bankrupt, there is no helping this company now, it's buried in debt and concentrated in bad housing markets with no turnaround for at least 5 years, it simply can't last that long.

Lots of talk right now about whether the housing market will have a soft landing or is crashing. Either way, I see house building stocks heading south faster than the S&P. Speculation is high right now and since the economic growth report missed its expected mark, I think the pessimist will win out for most large scale investors.

After so many months of great returns, I think investors are willing to take their profits and look elsewhere, especially if the overall market really turns south.

How could you go wrong with housing? Everybody needs housing!

I hope to catch this stock on the pop before investors realize that this short-term stimulus will be like the cash for clunkers program, resulting in a limited sales increase now followed by lower sales in the months to come.

SPF has been hit hard, as of late, due to the decline in the homebuilding industry. In addition, Standard Pacific Corp. was rated #3 by JD Power & Associates during an Oct 2006 homebuilder satisfaction rating. http://biz.yahoo.com/bizj/060913/1344925.html?.v=1 SPX also provides mortgage financing and title services to its homebuyers through its subsidiaries and joint ventures. For the long term, this stock should recover and easily outperform the major market indices, especially since SPF is an extreme performance investing stock.

In my numbers, Standard Pac is currently trading at a 12% discount to the group, in line with its historical avg. I believe a greater discount is warranted given my expectations for increased margin pressure and slower growth relative to peers
moving forward. It's a BUY

Have we found the bottom yet? I doubt it. However, I strongly agree with floridabuilder that *somebody* has emerge from this mess, and they will do so in a formidable position going forward, with virtually no well-capitalized competition to worry about. A quick scan of the SPF financials shows me a builder suffering through a tough time, but still maintaining positive cash flow. I can only conclude that this bodes well for the company, as everybody else around them struggles to keep creditors at bay.

CAPS Rating: 1 Star [277 outperforms / 315 underperforms]

I think this stock will test its lows again and they are too weighted in markets that are still crashing hard.

When will the housing crisis end? I'll bet it wont be until 2010. This stock will be taken over by then when it finally reaches $0.75

Mkt cap/ net current assets = 1.00
Price to free cash flow = 4.25
P/E = 12.64
It's difficult to say where the bottom is for homebuilding stocks. This is a good place to buy a first position, and there may be more opportunities to buy in '07.

treat this as a call option as standard pacific is not going bankrupt. Once the cash infusion comes in and this stock is no longer going bankrupt it will recover handsomely. Also this stock is tradint 0.20 of book value which is pretty insane. This stock will significantly outperform the S&P in the years to come if it survives. With an estimated eps of 2.30 once the housing market recovers, it means that the stock will trade at least at 17 dollars a share by 2012.

"You ought to be able to explain why you’re taking the job you’re taking, why you’re making the investment you’re making, or whatever it may be. And if it can’t stand applying pencil to paper, you’d better think it through some more. And if you can’t write an intelligent answer to those questions, don’t do it."

housing market will come back strong

This company may survive to 2010 and make a come back but as it stands it is losing ground badly on fundamentals. Generally, is a weak hold to moderate sell. It is of note, builders are suffering from collapse of housing bubble but SPF is not well set for long-term slump. If this cycle goes beyond 2010 it is unlikely this company can survive at all.

short term to long term pick.

Graham near or Below NCAV bucket (someone elses screen - not my analysis)

rally picks

tdrh