TOL ==> The Summer Solstice Winner

[New-born baby]

What's wrong?

Dawwwwgg NB, we agree on a chart, now we need Spikes input and if he agrees it will surley fly to the moon..haha, nottt any time soon

What's wrong, Runner? How can we three agree on anything? Recently, we've had a very hard time agreeing that "air is free." I have only one conclusion:

The Handwriting is on the Wall.

[jiesen]

TOL also seems to be springing back to life today:

http://finance.yahoo.com/q/bc?s=TOL&t=5d

Guess the handwriting on the wall said TOL will go up $4 in 4 days?

[scifos]

homebuilders were rocking today. My BZH and CTX were both up big, and I think someone here said BMHC jumped today too.

I think BZH was up due to an earnings release and CTX due to a share buyback program.

[mrmarket]

Robert Marcin -TSC
Builders' Stocks: Too Cheap Not to Own
By Robert Marcin
RealMoney.com Contributor
11/17/2005 9:26 AM EST
URL: http://www.thestreet.com/comment/rob.../10253409.html

D.R. Horton (DHI:NYSE) reported decent numbers Wednesday, and most importantly, its unit orders were up 28%. However, the bears are not writing about these orders the same way they commented on Toll's (TOL:NYSE) . Horton delivered 50,000 homes, compared with 9,000 for Toll. Now, you tell me what's happening in the housing market.


I don't think that many investors, not even the sell-side analysts, are aware that what really happened at Toll was a management mistake. They simply filled out existing communities too quickly last year. That maneuver gave them monster numbers then, but is a big problem today. Don't base your opinion of a $200 billion industry on Bob Toll's comments. Look at the entire group.

Hmmm. Horton orders up 28%, Beazer (BZH:NYSE) up 15%, Hovnanian (HOV:NYSE) up 38% and Pulte (PHM:NYSE) up 20%. What am I missing? Seems as if most of the large public builders are managing the current slowdown just fine.

I know that the real estate bull market is over. I have been incorrectly forecasting this for five quarters now. It's about time. Housing demand and prices have flattened. But if you keep reporting that as news, you need to buy a clue.

But, just as with the steel sector, high-quality housing stocks can trade up big in a soft landing. Don't get bummed by the incessant bearishness of the sound-bite shorts. The sector is too cheap not to own.

Once again, if the sector implodes, the builders have index-type downside. If it undergoes a soft landing, another big trade into spring.
Marcin vs. Cramer
Obviously, Jim Cramer and I disagree on the homebuilders. I had sold them into the "land bank" run, but repurchased them recently after their big decline.

However, our disagreement is more fundamental than that. He says to follow the stock-price action, and I say follow valuations and fundamentals. I have made an entire career out of buying stocks that are dropping big to cheap valuations, with good fundamentals.

He wants you to sell builders because they are dropping. I want you to buy them for the same reason. Well, let's apply the same question to another stock. Should you sell Sears Holdings (SHLD:Nasdaq) because the stock is plunging? Or is it a buy because the market does not get it? Sometimes, despite its "infinite wisdom," the market is wrong.

I do not know how my homebuilder trade will work out. Finding the absolute bottom is a problem, not a benefit. I call it the "curse of the downtick." It tends to inhibit large positions, especially when they rally quickly.

So I will continue to take the opposite side of the popular sound bite: "Avoid value stocks because they often get cheaper." Sometimes they do, sometimes they don't.

I have now tired of laying out my risk/reward case for the builders and will leave them alone if the bears reciprocate.

[mrmarket]

Earnings are coming out this Thursday, Dec 8. It will be interesting to see what forward looking statements they have. I think they significantly sandbagged themselves with their prior press releases so I'm looking for a big upside move here.

Let's see if I'm right.

[jiesen]

you're right- earnings are excellent!

with $16/share book value, and earnings of nearly $5 this year (and projected $5 next year) I don't see how this trades under $40.

http://biz.yahoo.com/ap/051208/earns_toll_brothers.html?.v=5

Toll Bros. 4Q Profit Soars, Tempers Outlook
Thursday December 8, 9:00 am ET
Toll Brothers 4Q Profit Soars 72 Percent, Tempers Outlook for Fiscal 2006, 2007 HORSHAM, Pa. (AP) -- Toll Brothers Inc., a leading builder of luxury homes, reported Thursday that its fiscal fourth-quarter profit rose 72 percent and topped expectations, but said fiscal 2006 earnings could miss Wall Street estimates on a slowing housing market, and was uncertain of its outlook for 2007. Its shares rose 1.6 percent in premarket trading.

The builder said earned $310.3 million, or $1.84 per share, in the three months ended Oct. 31, up from $180.6 million, or $1.11 per share, a year ago. Revenue climbed 40 percent to $2.02 billion from $1.45 billion last year. Analysts surveyed by Thomson Financial expected earnings of $1.65 per share on sales of about $2.02 billion. The company said its results in the latest quarter were the highest for any quarter in its history.

For the full year, earnings nearly doubled to $806.1 million, or $4.78 per share, from $409.1 million, or $2.52 per share, last year. Revenue rose to $5.79 billion from $3.86 billion.

Analysts forecast earnings of $4.59 per share on revenue of $5.81 billion for the year.

Toll Brothers forecast 2006 earnings would be between $4.79 and $5.27 per share, including 11 cents per share for stock options expense, on revenue of $6.65 billion to $7.25 billion. Analysts expect a profit of $5.25 per share on $6.74 billion in revenue.

The company said its outlook assumes deliveries of 9,500 to 10,200 homes, at an average price of $670,000 to $680,000 per home. It also expects $280 million to $300 million in revenue from four high-rise towers.

"We look to the future with cautious optimism," said Robert I. Toll, chairman and chief executive, in a statement. "We believe demand for our luxury homes relies, in large measure, on consumer confidence, which has suffered recently among our clientele. We also believe that the fundamental imbalance between supply and demand will reassert itself."

Toll said it expects "record results" in fiscal 2007 on expected demand and projected community growth, but noted "these are uncertain times and results could prove better or worse than the previous guidance we gave of 20 percent growth for fiscal 2007."

The company said it would provide more detailed guidance for fiscal 2007 later in the year. Analysts forecast a profit of $5.55 per share on revenue of about $7.4 billion.

Its shares rose 55 cents to $34.85 in premarket trading.

[billyjoe]

Jiesen,
Just had live interview with Mr. Toll on CNN and he seemed quite confident. He said interest rates have had no effect on upscale home sales. They're still strong in most areas of the U.S. with Detroit and Chicago being the exceptions. They never lower prices , they might offer upgraded kitchens etc. He says next year sales could either be up 20% or down 20% , but all in all it doesn't look bad. He also said consumer confidence was the biggest single factor effecting business.

billyjoe

[mrmarket]

Action Alerts PLUS
How Stocks Win on Housing Buildup
By James J. Cramer
RealMoney.com Columnist
12/29/2005 11:51 AM EST
URL: http://www.thestreet.com/pom/pomaa/10259447.html




The single most bullish thing about stocks I know is that existing inventory of unsold homes hit another new high today.

While we haven't felt the impact yet -- which will be a decline in price of houses, not the number of them sold -- owing to the inability of homeowners to compute that the asset may not be going up anymore, it is the story to watch in 2006. Because the "headline" competition from real estate is withering, and that's what matters.

In any given market, there are marginal buyers who supply the fuel to move inventory at higher prices. We have lacked those marginal buyers in stocks for six years. They all got crushed in 2000-2001 and then went to real estate, which had the same "can't miss" characteristics of Webvan and E-Toys, although you can live in your home after it goes down, but you can't live in those stock certificates. Now those marginal buyers, deep into real estate, are reading uncomfortable headlines and are beginning to get nervous, the first step toward cutting price to move.

We have the biggest supply of unsold homes in 20 years, but we are a huge growth economy -- people always act as if we are some sort of Switzerland-meets-Belgium, when our growth -- legal and illegal -- is more akin to Third-World growth than First-World. So that increase in supply hasn't tipped anything yet. Think about it: We had 240 million people living here in 1986; now there are 300 million. That we would freak out about the same inventory number, given the huge gain in the denominator, is absurd!

But if rates keep going up -- a given, I believe -- and if immigration gets shut down -- a possibility, albeit slim -- we are going to have an adjusted unsold inventory number that, sometime in 2006, could drive those marginal buyers to turn sellers and turn to the stock market.

It is a work in progress, because I believe in a soft landing, again because of the population growth. If anyone in the media actually bothered to think about the population growth before jumping on the "highest unsold inventory in 19 years" headline, they'd know why Toll (TOL:NYSE) and Lennar (LEN:NYSE) aren't going down and why Beazer (BZH:NYSE) and KB (KBH:NYSE) are such great stocks still. But that involves going to Google, getting the population of 1986 and getting the population now, and, alas, that's not in the cards for the people who write these stories.

Still, watch this story. If the unsold inventory number grows by 25%, then I believe we will be in a situation that will be extremely bullish for stocks: Lower short-term rates and a price-to-earnings ratio that could be mouth-watering to those median performance--chasing hounds who determine so much about what area is hot for investment.

[Adam]

I understand both views of this story. And in all actuality, I hope both situations happen. The housing market slumps, people get scared go to stocks push the market up. At the same time I look to buy homes from these same people at good rates for these reasons. I think if analyzed correctly almost any situation can present the opertunity the make wise investments.

I hope i'm not precieved as someone who takes advantage of people rather the world and current market conditions. I have a property up for sale within 90 days that is in a zone of NJ at risk if the pending sale inventory increases of that 25%. After that I welcome it. Just like in the stock market, proper reaserch, dudiligence, and timing. The part that is different and I love is the negotiation. As the numbers are showing there is a slowdown as expected with increasing intrest rates but a fallout Is hard for me to see. The companies mentioned by earlier messages without researching them I recognize as some being in the south and southwest( however, KHOV's got a toe in every town in America by now) I think the only cooldown is in this reagion of overbuilding. Currently I'm selling a property in FL I had for two years. The value of the house has went up 30% per year. Not a nice house in an ok location. Not near the water. Doubled the investment capitol in two years. Not bad but not what I wanted. Everthing is so realative to the immediate factors of the environment of whatever investment your in, at the time, its all in your your perception and abilities to dicifer those foctors that affect your position.

In every venture I learn of different issues that affect my investments. I've learned most from my biggest losses. I've lost just as much second guessing myself. I work hard keeping it to up side and am getting better. I'm not formily educated but I never stop trying to learn. From some of the people on this I site I've gotten the best and most strait forward information from. I thank MM and everyone involved in the forum. Everything you hear in the media is after the fact entertainment. Thats what "Cramer" and actors alike are paid to do. IBD wants you to pay for everything! Sensationalize the best thing you got. Its like an FN constant informercial and who the hell wants that?

Sorry for the rant. Thankyou Mr Market!

[mrmarket]

you sees....

Homebuilders Rally on Positive Reports
Monday January 9, 3:04 pm ET
Shares of Homebuilders Rally on Positive Wall Street Reports


NEW YORK (AP) -- Shares of big homebuilders jumped on Monday after a batch of positive analyst reports painted an optimistic outlook for the housing sector in 2006, reassuring investors that the nation's homebuilders may have more room to rally after nearly five years of frenzied growth.


Homebuilders like Lennar Corp., KB Home, Pulte Homes Inc. and Toll Brothers Inc. all rose more than 4 percent on the New York Stock Exchange in afternoon trading. The Philadelphia Housing Sector Index, an index of 21 construction industry stocks, advanced 3.5 percent, led by manufactured homebuilder Champion Enterprises Inc., which climbed 8.4 percent.

"Long-term housing demand remains strong, (with) housing starts over the next decade to be in a range of 1.8 to 2 million per year," Merrill Lynch analyst Lorraine Maikis wrote in a report dated Jan. 9.

Housing starts, which refer to the beginning of construction of a unit of housing, are the bellwether indicator of the housing industry. The brokerage also projected large homebuilders' current backlog of homes for sale, land holdings, and access to capital "should translate into an above-industry unit growth rate in 2006."

Merrill's bright forecast for the industry coincided with bullish reports issued by other investment banks on Monday.

"We believe 2006 will shape up to be another strong year for the builders, as we look for new orders to increase by 16 percent on average on the back of continued industry consolidation, increasing market share gains and a benign interest rate and economic landscape," Deutsche Bank analyst Gregg Schoenleber wrote in a client note.

Although Deutsche Bank forecast housing starts will remain flat over the next year, "our outlook suggests the builders will grow sales and earnings at a more modest pace, 20 percent and 16 percent, respectively," compared to earnings growth of 42 percent in 2005, driven by strong backlog and order growth.

The positive research reports come as mortgage rates have been rising and home sales and price appreciation have been slowing in recent months, leading a growing camp on Wall Street to predict the nation's housing market has entered a downturn.

Recent economic indicators measuring housing starts, new and existing home sales and other data have generally pointed to a slowdown in the sector.

A growing number of homebuilders have also cautioned they are seeing a return to historical trends after posting several years of double-digit earnings and sales growth. Last Thursday, Colorado's top homebuilder MDC Holdings Inc. reported lower home orders in the fourth quarter, citing shortfalls in Virginia, Colorado and Arizona.

However, even MDC's fourth-quarter slowdown did not deter Citigroup housing analyst Stephen Kim, who predicted homebuilder stocks will rally on stronger-than-expected spring order data. "MDC's disappointing fourth-quarter orders do not portend a wider housing downturn, as many skeptics fear," Kim wrote in a note dated Jan. 8, adding that MDC's shortfall was specific to the company, not the overall industry.

"Although homebuilding stocks may continue to tread water during the rest of winter, we continue to believe the group is positioned to rally" with the advent of the spring selling season, which starts in early February, Kim wrote. "We believe the entire group will participate in the rally later this year."

Shares of Lennar gained $2.80, or 4.5 percent, to $65.42 on the NYSE, while shares of KB Home rose $3.79, or 5 percent, to $79.53. Pulte Homes added $2.35, or nearly 6 percent, to $43.97 in afternoon trading on the Big Board, while Toll Brothers shares jumped $2.10, or 5.6 percent, to $39.33.

[Runner]

MR. M did TOL put in a bottom here? Looks like a thrust to me.

[mrmarket]

Here they come!

Is Toll Brothers a bargain?
Homebuilder's shares rise after favorable Barron's report
E-mail | Print | | Disable live quotes By John Spence, MarketWatch
Last Update: 11:22 AM ET Feb 21, 2006


BOSTON (MarketWatch) -- Shares of Toll Brothers Inc. pulled back from a 5% premarket rise in early trading Tuesday after a weekend Barron's story saying the company's battered stock looks undervalued as investors fret over the housing bubble.

The Horsham, Pa.-based builder (TOL : Toll Brothers, Inc.
of luxury homes, which has seen its shares lose nearly half their value since last summer's peak, is well-positioned to grow profits due to its sizable land bank and experience in obtaining entitlements in an increasingly difficult regulatory environment, according to the report.

Toll's rising book value, driven largely by its vast land holdings, is another reason for optimism. Additionally, Toll's focus on high-end buyers in some of the hottest markets bodes well with older Americans buying second homes, according to Barron's, which is published by Dow Jones & Co., also the publisher of MarketWatch.

The report sparked renewed debate over the health of the U.S. housing market and the outlook for homebuilder stocks, which as a group have the lowest price-to-earnings ratio for any sector, Barron's noted. Toll's P/E ratio, a common measure of valuation, is just above 6, compared with nearly 20 for the S&P 500 index

Although the companies have been growing profits at a furious pace in recent years on the housing boom and low mortgage rates, investors still see homebuilding as a cyclical industry. Memories of overbuilding and previous pullbacks are helping keep P/E ratios, analysts say.

The homebuilders counter that they run their businesses with more discipline and less leverage than previous decades. Additionally, large public builders can continue to expand even in a cooling housing market by seizing market share from smaller competitors, bulls say.

Another sign for hope could be seen in last week's Commerce Department report that new construction of U.S. homes climbed 14.5% in January, reaching the highest seasonally adjusted rate in over 30 years. Building permits, a measure of future activity, rose 6.8%. See story.
Yet economists cautioned that January's rise could be a "temporary burst" on unseasonably warm weather and a brief pullback in mortgage rates. The benchmark 30-year fixed-rate mortgage dropped in early January but has been moving steadily higher since, hitting 6.28% in the latest week, according to Freddie Mac.

Meanwhile, bearish analysts say rising mortgage rates, higher cancellations and rising inventories of homes for sale are warning signals for the stocks. At the same time, many of the most lucrative coastal markets like California and Florida are showing signs of a slowdown. Read more on the debate over housing stocks.

Last week, Federal Reserve chief Ben Bernanke said he expects the housing market to cool, but not crash, as home price increases and construction will likely come down from their high levels in recent years.

Several builders, including Toll, have cautioned on their outlooks for 2006. Earlier this month, Toll cut its forecast for fiscal-2006 home deliveries for a second time, citing slowing demand. See previous story.

Over the past six months, Toll has fallen the heaviest among the large public builders, with shares losing 38%.

Among the other bellwethers for the same period, Meritage Homes Corp. is down 23%, Hovnanian Enterprises Inc. (HOV : Hovnanian Enterprises, Inc.
is off 23%, Standard Pacific Corp. (SPF : Standard Pacific Corp.
shed 19% and M.D.C. Holdings Inc. (MDC : M.D.C. Holdings, Inc.
lost 16%.
The Dow Jones U.S. Home Construction Index (DJ_HOM : DJ US Home Construction Index) is off over 20% from its 52-week high.

Toll is due to report profits for its January quarter on Thursday. Analysts polled by Thomson First Call forecast earnings, on average, of 92 cents a share and revenue of $1.36 billion. A year ago, Toll reported earnings of $1.33 a share and revenue of $999.1 million.

Investors will be closely watching the company's new-order growth as the spring selling season gets underway. While Barron's noted Toll's focus on luxury homes is a positive given the changing demographics of the U.S. population, some analysts see demand weakening the most at the higher price points.

Toll ranks as 14th among homebuilders in the country in terms of home sales and 11th in revenue due to its niche serving the luxury homebuyer segment, according to Banc of America Securities.

Toll shares could hit $50 this year if the housing market can sidestep a major correction, Barron's said.

The stock rose 44 cents, or 1.5%, to $30.19 late Tuesday morning as most homebuilder stocks traded lower.

[Jim Smith]

I am glad you made this your summer solstice pick cuz that's how long you'll be married to it....I do like the stock, but I'll like it better in late april....

[New-born baby]

Inverted!

Better take a close look at that chart, Jim, et al. That's an inverted head and shoulders. This is the time to move into the stock. Lots of upside potential now. What are those calls selling for? The JUN $35 Call sells for a mere $1.45, and the $40 call will set you back just 45 cents. I tell you I think the in the money $35 June Call is the way to go, because as TOL rises the delta is going to approach 1. It will move almost penny for penny with the stock . . . .

This is a little later than expected, but Mr. Market has "got a winnah, got a winnah!"

[mrmarket]

rutro

May 6, 2006





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CONFERENCE CALL


3
See a transcript4 of Toll Brothers's conference call, provided by Thomson StreetEvents (www.streetevents.com5). (Adobe Acrobat Required6.)

Toll Brothers Orders Fall 32%; Delivery Goal Is Cut

By JANET MORRISSEY
May 6, 2006

Toll Brothers Inc., a leading builder of luxury homes, posted a 32% decline in orders in its fiscal second quarter from the year-earlier period, steeper than the 29% drop-off in its fiscal first quarter.

The company, based in Horsham, Pa., said demand was down for the period ended April 30 in all of Toll's markets and the company lowered its target for the number of homes it expects to deliver in fiscal 2006 by 200 units. This has raised speculation that the company will likely cut its earnings estimate for fiscal 2006.

Contract orders, which reflect revenue the company will receive three or four quarters later when a home is delivered, totaled 2,167 units, down 32%. The value of the orders fell 29% to $1.56 billion.

NEWSHOUND QUIZ


1
Care to test your memory of recent news events in WSJ.com's weekly Newshound Quiz? Sign up for the quiz2, and then look for the latest installments in your inbox on Fridays. Be the first to reply with all your answers correct, and you can declare yourself Top Dog!"We are entering our ninth month of slower sales in most of our markets," Chief Executive Robert Toll said. He attributed the declining demand to a surge in cancellations and to speculative buyers who are dropping out of the market and putting the homes they recently acquired up for sale. Although Mr. Toll said his company doesn't sell to speculators, "we have certainly been impacted by the overall increase in supply."

UBS analyst Margaret Whelan noted that the company's cancellation rate doubled to 8.5% in the latest quarter from a year earlier. "While demand for higher-priced homes has been more negatively impacted this cycle, supply has risen, driven by higher cancellations rates and speculator sales," she said.

Bank of America Securities analyst Daniel Oppenheim said the 32% order decline came despite a 15% increase in the number of Toll's subdivisions. As a result, the sales per community fared even worse, falling 41%, he said.

Exacerbating the oversupply and cancellation issues were competitors that have been reducing prices on homes in order to move sales. "Much of the oversupply is now being aggressively discounted by others," said Mr. Toll. He indicated that his company isn't slashing prices. Mr. Toll went on to say that he believes the glut of inventory in the high-end market will be a short-term phenomenon. "The demographics of the luxury market remain strong with growing numbers of affluent households," he said. At the same time, land and zoning approvals are getting tougher and more expensive, which should limit the amount of new construction and new supply hitting the market.

But Mr. Oppenheim disagrees. He believes the oversupply problem will get worse before it gets better, in part because home builders "have not yet adjusted their construction to match the slower pace of sales." He predicts this oversupply problem will lead to lower prices in many markets.

Mr. Oppenheim, who has been one of the more bearish home-building analysts, slashed his earnings estimates. He cut his fiscal 2006 estimate to $4.65 a share from $4.90 a share, his fiscal 2007 projection to $3.75 a share from $4.20 a share and his fiscal 2008 estimate to $3 a share from $3.45 a share.

Toll is scheduled to release its full fiscal second-quarter earnings report on May 23. As of 4 p.m. composite trading Friday on the New York Stock Exchange, Toll was at $30.85, up $1.21.