Speaking of things to do with CASH!!! HOV is 0.67 and you can sell the Aug $1 calls for 0.15 so net 0.52 means future sales pay 20% every 6 months (if you don't get called away with a 100% gain). They are likely to do a reverse split but let's buy 10,000 shares for $6,700 in the OOP and sell 100 of the Aug $1 calls for 0.15 ($1,500) and that's net $5,200 for our entry.
Earnings were pretty good on 12/6. I like betting HOV when they are down as it's a 100-year family business that seems to navigate the market's ups and downs fairly well – you just have to be patient.
Hovnanian Enterprises (NYSE:HOV) jumps 9.1% after fiscal Q4 EPS beat consensus as average price of homes delivered rose at a faster pace than the number of homes delivered.
Q4 EPS of 30 cents beat consensus by 10 cents and compares with 8 cents a year ago.
Q4 deliveries, including unconsolidated joint ventures, increased 2.4% to 1,829 homes from 1,787 a year ago; average price of homes delivered rose 8.1% to $462,254 vs. $427,741 a year ago.
Q4 homebuilding gross margin of 16.5% increased from 13.7% a year ago.
Q4 contracts, including unconsolidated joint ventures, declined 12% to 1,179 homes from 1,344 a year ago.
Q4 adjusted EBITDA increased to $89.9M from $81.1M Y/Y.
Q4 total revenue slid to $614.8M from $721.7M a year ago.
The company, though, is optimistic that housing sales will pick up as the home buyers adjust to higher mortgage rates. "Given the overall demographic trends and the strong U.S. economy, as home buyers become adjusted to the higher mortgage rate environment, expectations will likely adjust and the housing market should resume its path of recovery,” says Chairman, President, and CEO Ara K. Hovnanian.
Conference call at 11:00 AM ET.
Previously: Hovnanian beats by $0.10, misses on revenue (Dec. 6)
| Year End 31st Oct | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019E | 2020E | CAGR / Avg | |
| $m | 1,851 | 2,063 | 2,148 | 2,752 | 2,452 | 1,991 | 1,841 | 1,910 | +1.5% | |
| $m | 130.3 | 128.3 | 97.9 | 134.9 | 91.5 | 122.5 | -1.2% | |||
| $m | 31.3 | 307.1 | -16.1 | -2.82 | -332.2 | 4.52 | -7.80 | -0.10 | -32.1% | |
| $ | 0.22 | 1.87 | -0.11 | -0.019 | -2.25 | 0.030 | -32.7% | |||
| $ | 0.22 | 1.87 | -0.11 | -0.005 | -2.10 | 0.057 | -0.050 | -23.5% | ||
| % | +757.7 | |||||||||
| x | 11.8 | n/a | n/a | |||||||
| x | n/a | n/a | n/a | |||||||
| Profitability | ||||||||||
In a good year, they can make a few hundred Million yet you can buy the whole company for $100M and here's the last 6 Qs ending in Q3 2018:
| Operating Profit/Income | -13.9 | 47.3 | 12.2 | 24.0 | 23.2 | 63.2 |
Nothing wrong with that! Net Income needs work:
| Net Income | -337.2 | 11.8 | -30.8 | -9.82 | -1.03 | 46.2 |
They have $188M in cash and are servicing their debt ($1.7Bn) so I doubt they are going BK but that's what they are priced like.
