Damn, I was just thinking I wanted to look at them because the fires in CA present a major long-term need for housing:
- Down nearly 10% after reporting its first year-over-year decline in new home orders in four years, Toll Brothers (NYSE:TOL) has reversed dramatically, now higher by 0.2%.
- We could attribute the move to comments in the conference call, but that doesn't begin until 2 ET.
- More likely, there's some sell (buy) the news action going on – the homebuilders have been relentlessly sold this year, squeezed by higher rates, higher prices, higher costs, and the removal of the SALT deduction. But the news is improving, at least on rates. The 10-year yield is at a three-month low and the Fed rate hike cycle is showing signs of ending.
- Previously: Homebuilders cry for help (Dec. 4)
Still very low at $33 but $30 was a huge bargain. $33 is $4.85Bn and they are good for $600M but very big in CA so, once the insurance money comes in – lots of opportunity for all builders out there.
| Year End 31st Oct | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | TTM | 2018E | 2019E | CAGR / Avg | |
| $m | 1,883 | 2,674 | 3,912 | 4,171 | 5,170 | 5,815 | 6,716 | 7,037 | 7,773 | +25.3% | |
| $m | 63.4 | 214.3 | 397.2 | 446.9 | 490.1 | 644.9 | 732.2 | +59.0% | |||
| $m | 487.1 | 170.6 | 340 | 363.2 | 382.1 | 535.5 | 629.1 | 710.5 | 756.6 | +1.9% | |
| $ | 2.86 | 0.97 | 1.84 | 1.97 | 2.18 | 3.17 | 3.75 | +2.0% | |||
| $ | 2.86 | 0.90 | 1.75 | 1.93 | 2.13 | 3.13 | 3.73 | 4.61 | 5.06 | +1.9% | |
| % | +1,038 | -68.4 | +93.2 | +10.2 | +10.6 | +47.1 | +18.9 | +47.1 | +9.79 | ||
| x | 10.7 | 8.99 | 7.27 | 6.62 | |||||||
| x | 0.23 | 0.19 | 0.74 | 1.59 | |||||||
| Profitability | |||||||||||
I think, for the LTP, this is one of those things where there's certainly no reason not to sell some puts for income so let's sell 10 of the TOL 2021 $30 puts for $4.50 ($4,500) and, in the very least, we get a nice net $25.50 entry.
