QUOTE AND NEWS
SeekingAlpha  Sep 8  Comment 
By James Bjorkman: Are Homebuilders Dead? Hovnanian Enterprises Inc (NYSE:HOV) enjoyed an epic run higher after the 2009 recession. From a low at $0.89, it cruised to a high of $7.43 at the end of December 2012. Since then, HOV has pulled...
SeekingAlpha  Sep 4  Comment 
By SA Transcripts: Hovnanian Enterprises, Inc (NYSE:HOV) Q3 2014 Earnings Conference Call September 4, 2014 11:00 AM ET Executives Jeff O'Keefe - VP, IR Ara Hovnanian - Chairman, President and CEO Larry Sorsby - EVP and CFO ...
TheStreet.com  Sep 4  Comment 
NEW YORK (TheStreet) -- Shares of Hovnanian Enterprises Inc. are higher by 1.55% to $4.26 in mid-morning trading on Thursday, after the company reported a rise in net income for the 2014 third quarter to $17.1 million, or 11 cents per share,...
Wall Street Journal  Sep 4  Comment 
Hovnanian Enterprises said its fiscal third-quarter earnings surged as the home builder's revenue benefited from growth in deliveries and margins strengthened.
Benzinga  Sep 4  Comment 
Hovnanian Enterprises (NYSE: HOV) reported upbeat earnings for its fiscal third quarter. The Red Bank, New Jersey-based company posted quarterly net income of $17.1 million, or $0.11 per share, versus a year-ago net income of $8.5 million, or...
MarketWatch  Sep 4  Comment 
Shares of Hovnanian Enterprises rose 1.9% in premarket trade Thursday, after the home builder beat fiscal third-quarter profit expectations, which offset a slight sales miss. For the quarter ended July 31, the company earned $17.1 million, or 11...
Benzinga  Sep 3  Comment 
Toll Brothers Inc (NYSE: TOL) dragged down housing sector stocks Wednesday when it told investors that the number of sales contracts it signed in the fiscal third quarter fell six percent. Toll, based in Horsham, Pennsylvania, signed 1,405...
SeekingAlpha  Sep 3  Comment 
By WhisperNumber: Hovnanian Enterprises (NYSE:HOV) is expected to report earnings on Thursday, September 4th. The whisper number is $0.09, in-line with the analysts' estimate and showing neutral confidence from investors. Hovnanian has a 48%...
Benzinga  Sep 2  Comment 
The new earnings season is a few weeks away yet, but among the off-season earnings reports coming up are those from residential homebuilders Hovnanian Enterprises, Inc. (NYSE: HOV) and Toll Brothers, Inc. (NYSE: TOL). Reports on the housing...
Benzinga  Aug 30  Comment 
Two big housing construction companies report earnings next week and investors will be looking for improved growth in orders as well as at least a little wider profit margins, an analyst said Friday. MKM Partners' Megan McGrath is concerned...




 
TOP CONTRIBUTORS

Hovanian Enterprises, Inc. (NYSE: HOV) is a home builder and financial services provider based in the US. The company makes money by designing, constructing, marketing, and selling single-family detached homes, attached town homes and condominiums, urban infill, and active adult homes.[1] By appealing to first-time buyers, second-time move-up buyers, luxury buyers, active adult buyers, and empty nesters, the company offers homes in 284 different communities in 44 markets and 18 states across the country.[2]The secondary real estate market will continue to create a lag factor for the home building industry as demand is first sopped up by secondary real estate.

Business Growth

HOV posted revenues of $1,371.8 million for FY2010, a 14% drop in revenues compared to FY2009.[3] This drop is consistent with the decreases in revenue and gross margins all throughout 2007, 2008 and 2009 in the economic downturn. Key to business growth for HOV include its gross margin, cancellation rates and total deliveries.[4] Although the company continued to see declines in deliveries and revenues in FY2010, the company's cancellation rates of 23% to 24% in the later quarter of FY2010 seem to be more consistent to normalized levels, similar to those seen in FY2003 and 2004.[5] As the market for new homes continue to decline, the company has changed its business strategy to land acquisition and construction practices. It has also shortened its land pipeline, reduced production volumes, and balanced home price and profitability with sales pace. By making the company leaner and acquiring assets at cheap prices, HOV hopes to gain the upside when the economy finally recovers.[6]

Trends and Forces

Home Buyer Demand is Highly Dependent Upon Resale, Rents, and Lending

Because HOV operates in the new housing development business, the price which it may set its final sale price is highly dependent upon existing houses in the market. In particular, this existing housing demand comes about two-fold; one from resale of current homes and a second from the rental sphere. Traditionally, with high lending requirements, households are forced to rent if they cannot afford to secure adequate lending without putting down a sizable down-payment. Further with a high inventory of existing homes for sale, the housing market typically soaks up those homes before builders such as HOV may come into the playing sphere. These factors ultimately put downward pressure on its revenues.

Housing Industry Recovery will allow HOV to Capture Upside

Several signals of a housing industry bottom have already become apparent. Recession has dealt a severe blow to the home-building sector and new construction is far below the rate needed for normal population growth and replacement of older homes. Job losses appear to be moderating, consumer spending is up, if only slightly, and manufacturing and other industrial data have provided encouragement.[7] The massive drop in prices, federal incentives for buyers and relatively low borrowing are making housing more affordable. According to Department of Commerce, sales of new homes rose by the fastest pace in over four years to a seasonally adjusted annual rate of 433,000 units, well above the 390,000 rate economists were expecting. New home sales were up 32% in Northeast where Hovnanian has considerable exposure.[8]

Competition

As housing prices have considerably sunk in all major US cities since 2006 levels, homebuilders have gone on a rampant spending spree to acquire cheap assets. As a diversified home builder, HOV is competing with a wide array of other large homebuilders such as:

  • NVR (NVR) is a diversified home builder that operates differently from the traditional scope in the fact that it does not actually purchase the land it builds upon, thereby translating to higher ROAs.
  • Lennar (LEN) is homebuilder and a provider of financial services that appeals also toward the move-up market just like SPF.
  • KB Home (KBH) is a diversified homebuilder that appeals toward the more luxury end basis of home construction.




References

http://www.istockanalyst.com/article/viewarticle/articleid/3704160

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