(This is an excerpt from an article I originally published on Seeking Alpha on June 17, 2013. Click here to read the entire piece.)
In September of last year, Toll Brothers (TOL) printed a near 7-year high. It was the culmination of an amazing 12-month run that took the stock up 164% from a retest of 2008 and 2009 lows. It was one of the more incredible (relative) turn-arounds in the homebuilder space.
{snip} It seems in TOL’s case, the market has priced in the housing recovery in one quick burst – At least that is an interpretation consistent with the stock’s inability to rally further on outright bullish earnings news.
As a point of comparison, here are the performances of other publicly traded homebuilders. {snip}
Notice the remarkable consistency in the overall pricing of the housing recovery from the lows relative to the bubble peak even as year-to-date performances have varied greatly. TOL experienced a large share of its recovery before this year while other homebuilders are just now catching up. I suspect that as a group, the 40%+ price recovery is a cap for now until a fresh positive catalyst appears.
I read through the Seeking Alpha transcript of TOL’s earnings conference call looking for a smoking gun to explain the muted reaction. In the transcript, I found a lot of bullish news and encouraging signs for the housing market, but no clear sign of any warning. I also found a lot of wary analysts probing for hints of what to expect NEXT year. {snip}
{snip}
With these data points as backdrop, I took notes on the TOL conference call. The following is not a comprehensive summary; it represents the nuggets I found of most interest. They all point to a very robust business for TOL for the rest of 2013 and into 2014.
{snip}
Be careful out there!
(This is an excerpt from an article I originally published on Seeking Alpha on June 17, 2013. Click here to read the entire piece.)
Full disclosure: no positions