Friday, April 01, 2005

Hovnanian Looks Like Toll Looks Like...

Hovnanian Enterprises Inc. (HOV) is out with the financials today, and the figures continue the trend. more and more inventory. The current ratio is getting ugly as well.

10 Comments:

At 11:44 AM, Anonymous Anonymous said...

ben
the inventory listed is based on current prices for each quarter or the orgl prices?
if it is current prices, due to recent prices rise, no surprise that invetory is hig, no?

 
At 11:55 AM, Blogger Ben Jones said...

anon,
My understanding is it is based on cost or market, whichever is lowest.
Standard GAAP...Ben

 
At 12:41 PM, Anonymous JJ said...

Historical cost would be standard operating procedure, which would obviate effects from rising list prices, but might let through materials cost inflation (which is definitely occurring). There's also a strong incentive to book at cost, given that you don't to show high or growing nominal inventories, esp. when you've supposedly got these massive backlogs of pre-orders and people salivating to take delivery. Isn't that their story on the conference calls at least?

I don't see a lot of the mainline builders upping their list prices right now. Maybe others have, but I haven't seen it. Have see many more ads for free dishwashers and "upgraded cabinets!" of late locally. Also seen declining ask prices for a group of about 20 new-builds that I track on the local MLS.

 
At 1:27 PM, Anonymous Anonymous said...

Is it me or is everything out of whack ?

$100 oil ? $4B housing inventories. Jobs are declining relative to our population growth. The DOW fell 100 points today. Interest rates are still stupidly low. NY apartments are worth $1.2M.

I just can't get my head around everything that is going on. Nothing makes sense. It is like I'm living in some sort of psuedo relistic fog and I can't seem to wake myself up.

 
At 1:37 PM, Blogger Ben Jones said...

(It is like I'm living in some sort of psuedo realistic fog)

We all just have to keep our wits about us. This is what mania's are like. Nonsensical. The flood of money the central banks have issued is having consequences and we'll just have to ride it out. Did buying internet stocks with credit cards seem right? Good post, thanks..Ben

 
At 1:55 PM, Anonymous dry fly said...

They have an increase of $800 M in inventory y/y from Oct 03-Oct 04 to about $2.5B... then HOLD that level until now... on falling revenue... with a 'real' (ie less inventory) acid test of about one to four...

...and the stock goes up...

(HOV) At 4:01PM ET:
51.57 +0.57 (1.12%)

I wonder what happens when the have 'bad' numbers...

 
At 2:17 PM, Anonymous Melissa said...

I was so irritated today with this SAME company. They have FALSE information on a listing in the MLS. I wish companies who post information on the Internet would hold to the same standards as if you were in a store and saw something on the shelf for a certain price.

Washington Homes (aka Hovnanian) listed a "spec house" for 507K. When I called, the lady said tee hee, it isn't finished yet and it's really 525K. And it's not the model with the amenities we have listed in the MLS.

I can't wait for them to change their tune when things turn to a buyer market. Bad information ticks me off!!

I shouldn't even be looking to buy, but we're closing on our house in a few weeks and need somewhere to live . . . I have been studying the housing markets for the last several years. It is definitely a worthwhile subject to be discussing now.

I would like to rent but part of me is thinking we'll just find that perfect house to buy.

We've sold three houses in the past 10 years but always for personal reasons, never looking for a way to cash out, until now.

 
At 2:26 PM, Blogger Ben Jones said...

dry fly,
Good info on HOV. All the HBs were up today. They are in mania mode. Remember when internet firms would announce zero earnings and go up 20%?..Ben

 
At 2:33 PM, Blogger Ben Jones said...

Melissa,
(I shouldn't even be looking to buy, but we're closing on our house in a few weeks and need somewhere to live)

Here in Arizona, lots of Californians are pouring in to buy houses that cost half of what they just sold for. It makes sense. Good luck with the new house.

As to HOV, any reader comments about the builders or market details are greatly appreciated. Thanks! Ben

 
At 8:42 PM, Anonymous Melissa said...

I enjoy this blog immensely. Thank you.

Yes, we are able to move further out of the D.C. area where the prices are cheaper and the countryside beckons. I am studying the outer Northern Virginia market now, including Fairfax, Loudoun, Prince William, Fauquier, and Culpeper counties. I am keeping current statistics and comparing them with the data on the MRIS web site, as well as following OFHEO data.

This is an unusual market. The prices around here jumped with the rest of the country, beginning in about 2000. They were actually quite reasonable prior, considering this is the nation's capitol. Local pundits say we have thousands of new jobs and the price move is justified. I am wondering, though, how much is simply speculation. Everyone I know knows someone who has bought a flipper house around here.

Our house closes in two weeks. (I can't wait).

 

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