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LENNAR CORP CL A (LEN) |
trekkie23
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Joined: 14 Apr 2009
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 Posted: Tue Apr 14, 2009 1:04 pm Post subject: LENNAR CORP CL A (LEN) |
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| What are the thoughts on Lennar. It seems to stay in a similar price rangein the long run. Perhaps the price will rise? |
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LENNAR CORP CL A (LEN) Replies |
HenryTo
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Joined: 06 Aug 2004
Posts: 11740
Location: Los Angeles, California
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| Posted: Mon Sep 19, 2011 4:20 pm Post subject: |
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Morningstar on LEN's 3Q results:
| Quote: | | Lennar's LEN third-quarter results indicate that no other public builder is currently operating on a higher plane. Roughly flat revenue, strong gross margins, and increased deliveries and orders make Lennar's recent performance really stand out. That said, the company's Rialto business realized a loss in its joint venture portfolio. We're unlikely to change our fair value estimate as a result. Industry-leading gross margins in the company's homebuilding operation were 21.1%, aided 120 basis points by a noncash change in estimate but hindered by 130 basis points of valuation adjustments. Consolidated revenue in homebuilding was flat, with a 3% increase in average prices offset by a 3% decline in deliveries. Impressively, consolidated orders were up almost 11% year over year, and backlog increased 16%. Operating earnings for the Rialto Investments segment were $5.6 million (net of $6.1 million of earnings attributable to noncontrolling interests) but were entirely offset by segment's joint venture loss of $6.5 million. The latter was driven by adverse marks in the company's portfolio formed under the Public-Private Investment Program with AllianceBernstein AB. |
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HenryTo
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Location: Los Angeles, California
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| Posted: Tue Mar 29, 2011 12:11 pm Post subject: |
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Morningstar on LEN's 1Q results:
| Quote: | | Lennar LEN has long been one of our favorites in homebuilding, and Tuesday's first-quarter results did nothing to change our opinion. The company is well along on its path toward sustained profitability, with its fourth straight quarter of positive net income. We see little need to adjust our model or our fair value estimate. Revenue was down 3%, but the gross margin remained above 20%, slightly above what we're modeling for 2011. Net income of $0.14 per share was aided by $30 million in pretax settlement gains from a party involved in the Barry Minkow matter. Overhead remained elevated, at a 16.4% selling, general, and administrative expense ratio, due mostly to lower closings. They were down 4% from last year, while orders fell 12%, owing to increased tax credit -induced demand last year. All in all, we're happy with first-quarter results and believe the company is very well positioned to take advantage of any uptick in demand. In the meantime, management will plod through the current environment producing a small amount of net income from its homebuilding operations, aided by growing earnings from its Rialto distressed-investment arm. |
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HenryTo
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Location: Los Angeles, California
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| Posted: Tue Jan 11, 2011 12:41 pm Post subject: |
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Morningstar on LEN's 2011 guidance:
| Quote: | | Lennar's LEN ability to consistently deliver positive operating profits despite acrid end market conditions in housing reinforces the firm's status as a best-of-breed homebuilder and one of our top picks in the sector. As a result of its operational prowess, Lennar offered initial 2011 guidance for profitability when many of its peers merely forecast uncertainty for the year ahead. Lennar should deliver regular profitability not only in its core homebuilding unit but also in its distressed real estate investment segment, Rialto, which should generate $0.25-$0.50 or more in earnings per share in 2011 and blossoming profitability for several years thereafter. Overcoming the lackluster demand environment, Lennar posted its fourth consecutive quarter of 20%-plus gross margins excluding valuation impairments in the fourth quarter, thanks to tight control over its construction costs and sales incentives. Write-offs continue to exhibit a broad trend of abatement, falling to about $50 million in the 12 months ended November, down from $230 million in the 12 months ended August. Homebuilding selling, general, and administrative expense remains tightly controlled, falling 230 basis points year over year and continuing its sequential decline as a percentage of sales. Rialto continues to shine. This segment's operating profit of $25 million also exhibited a solid trend of sequential growth, rising from $15 million and $19 million in the second and third quarters, respectively. Lennar continues to deploy capital into this business, buying $740 million of loans and real estate owned properties in the quarter at 42% of face value while also closing a separate $300 million equity fund dedicated to distressed real estate investment. Given the firm's demonstrated success in distressed investing during the prior real estate cycle and our expectations for firming real estate conditions over the intermediate and long term, we believe Rialto should continue to deliver regular, growing profitability for the next three or more years while its portfolio of more than $1.5 billion winds down. While this strength should continue to gird the firm's results, we suspect nascent trends of improvement in jobs and consumer confidence could turn current housing demand headwinds into tailwinds over the intermediate term. This scenario would push mushrooming profitability at Lennar that is probably still not reflected in its shares. |
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rffrydr
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Joined: 30 Oct 2005
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Location: Sunny California
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| Posted: Mon Sep 20, 2010 10:54 am Post subject: |
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Access to the public markets has also turned these guys into can't fail distressed asset purchasers. --Maybe the only real distressed fund going.
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Today is the Tomorrow you worried about Yesterday! |
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HenryTo
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Location: Los Angeles, California
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| Posted: Mon Sep 20, 2010 10:43 am Post subject: |
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Morningstar on LEN's 3Q earnings. As long as homebuilders can earn a decent return on capital, they will keep churning out the houses, despite the so-called inventory overhang and ongoing deleveraging in the residential mortgage sector. That means while housing prices will stabilize, don't look for real housing prices to enter into a new bull market at least for another ten years:
| Quote: | | Lennar LEN reported another period of crisp execution Monday, surpassing our and consensus estimates for near break-even results in its third fiscal quarter. Even with major headwinds created by the expiration of the federal homebuyer tax credits in April, Lennar delivered its third consecutive quarter of operating profit at its core homebuilding operation. The reported upside over our expectations stems largely from higher-than-expected home sales volume. Lennar's financial services arm continues to post predictably sound results, while momentum at distressed investment segment Rialto continues to build to a critical mass, w ith revenue and earnings increasing 10% and 26%, respectively, from the previous quarter. With solid operational progress demonstrated in each quarter year to date, Lennar sports a growing body of evidence that a return to sustainable profitability could be within reach, barring another dramatic falloff in already difficult macroeconomic conditions. With housing quite likely to begin firming sometime during the next several years, Lennar should again deliver returns in line with or above its cost of capital. Consequently, this report adds incremental support to our thesis and our fair value estimate. |
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HenryTo
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