As the company entered the public markets less than 90 days ago, it is flying somewhat under the radar of investors. Having a higher ASP in general allows the company to earn more in absolute gross margin dollars for every home closed, driving better operating leverage. At the end of Q1 2013, the company controlled over 40, 000 lots. What year did tmhc open their ipo filings. This is partially due to many probably not fully understanding how to value the company yet.
This is a more lucrative part of the new home market, as these buyers are generally less impacted by any number of factors that are important in the home buying process, and also transact at a higher average sales price "ASP. What year did tmhc open their ipo benefits. " Recall that earlier it was noted that Taylor Morrison controlled roughly 40, 000 lots as of March 31, 2013. Move-up buyers are essentially what the name implies. Given that it is known that company purchased a majority of its land while the market was still in a downturn, this land is worth more today than it is carried on the balance sheet for GAAP purposes. I have no business relationship with any company whose stock is mentioned in this article.
The company will generate significantly more net income over the balance of the year, will increase the book value of the company and drive down the price-to-book ratio assuming the stock stays at the same price. This is a great example of why investors always should do their own due diligence and not blindly trust the financial data found even at reputable sites such as Yahoo. The importance of this was covered in detail in another article with regards to M. D. C. Holdings (MDC), that also transacts at a higher "ASP" than the homebuilding peer group. What year did tmhc open their ipo date. Applying a 15x PE multiple to the estimated 2014 EPS, still significantly below that of its peers even when you account for their 2014 earnings estimates, the company should see its stock trade for just over $31 a share. 2011 and 2012 represented the years when housing bottomed and bounced, and also the period of time where those builders buying land will look very smart in the years to come if the housing market continues its recovery. 0 billion on new land purchases, acquiring 25, 532 lots, of which 21, 334 currently remain in our lot supply.
Taylor Morrison was purchased by a consortium of private investors in 2011, and just slightly more than two years later, these investors have cashed in their chips with the IPO of Taylor Morrison. This is incorrect as it does not incorporate the impact of the IPO and the additional shares issued. In addition, the company is valued significantly below its peers on a current year PE basis trading at 24x expected earnings. Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. Investment Opportunity. The sale was made necessary by the heavy debt load carried by Taylor Wimpey at the time. In Q1, 2013, the company generated over $25M in net income. This is likely due to Taylor Morrison not yet being a household name in the homebuilding universe. Taylor Morrison Homes (NYSE:TMHC) returned to the public markets in April 2013 with a successful IPO. Where the valuation story becomes most intriguing is when you look at the forward earnings estimates for the same builders shown above, and the PE multiple these builders currently trade at. From a price-to-book value standpoint, Taylor Morrison is valued towards the middle or high-end of the homebuilding peers that present good comparable companies: There are two reasons for this, and both are acceptable. 07 per share in 2014. For Q1 2013, Taylor Morrison saw adjusted gross margins of over 23% (adjusted to exclude amortized interest).
The table below shows the current year EPS expectations for each builder highlighted above, its current stock price, and the current PE multiple: The above table represents the greatest reason that investors should own Taylor Morrison today. We believe a substantial portion of our current land holdings was purchased at attractive prices at or near the low point of the market. This is seen by the performance of its stock price since the time the company came to market: The stock closed up about 6% the day of its IPO, ending at ~$23 a share. The risk is not significant as only about 10% of the company's closings for Q1 2013 were generated from its Canadian operations. This is only relevant in so much that Taylor Morrison has not run away from its IPO price creating a valuation imbalance that is seen with many companies immediately after they hit the public markets. Nonetheless, it's important for investors to understand that the company is not a pure play on the US market the way most other publicly traded homebuilders are. Another significant competitive advantage for Taylor Morrison is its focus on move-up buyers. The first quarterly report issued by Taylor Morrison, was for the period ending March 31st, 2013. The actual market cap of Taylor Morrison should be based off of the total shares outstanding, which are ~122M as seen in the prospectus that accompanied the IPO: It is impossible to value the company correctly without understanding its total shares outstanding. The IPO did not occur until April 2013, and thus many might find it difficult to understand the typical valuation metric of price-to-book used to value homebuilders. I am not receiving compensation for it (other than from Seeking Alpha). Finance: Notice that the market cap for the company currently shows $820M. Taylor Morrison notes a very critical fact in the SEC filing that accompanied its IPO. The second reason is that Taylor Morrison is already delivering significant profits to the bottom line, which serves to increase book value.
An example of this is shown in the image below taken from Yahoo! Investors have a chance right now to buy into Taylor Morrison while it still flies under the radar as a relatively new publicly traded company. This is what happens when a company is backed by deep pocketed private investors willing to aggressively take on risk outside of the public eye. Taylor Morrison is a unique investment in the homebuilding space as it was able to operate outside of the public eye for two of the most important years of the housing downturn.