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GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 10/10

vs
industry
vs
history
Cash to Debt 0.12
TPH's Cash to Debt is ranked lower than
100% of the Companies
in the Global industry.

( Industry Median: vs. TPH: 0.12 )
TPH' s 10-Year Cash to Debt Range
Min: 0.12   Max: No Debt
Current: 0.12

Equity to Asset 0.56
TPH's Equity to Asset is ranked lower than
100% of the Companies
in the Global industry.

( Industry Median: vs. TPH: 0.56 )
TPH' s 10-Year Equity to Asset Range
Min: 0.56   Max: 0.8
Current: 0.56

0.56
0.8
Interest Coverage No Debt
TPH's Interest Coverage is ranked lower than
100% of the Companies
in the Global industry.

( Industry Median: vs. TPH: No Debt )
TPH' s 10-Year Interest Coverage Range
Min: 9999.99   Max: 9999.99
Current: No Debt

Z-Score: 6.43
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 3/10

vs
industry
vs
history
Operating margin (%) 13.21
TPH's Operating margin (%) is ranked lower than
100% of the Companies
in the Global industry.

( Industry Median: vs. TPH: 13.21 )
TPH' s 10-Year Operating margin (%) Range
Min: -23.66   Max: 11.45
Current: 13.21

-23.66
11.45
Net-margin (%) 6.92
TPH's Net-margin (%) is ranked lower than
100% of the Companies
in the Global industry.

( Industry Median: vs. TPH: 6.92 )
TPH' s 10-Year Net-margin (%) Range
Min: -23.76   Max: 5.96
Current: 6.92

-23.76
5.96
ROE (%) 7.31
TPH's ROE (%) is ranked lower than
100% of the Companies
in the Global industry.

( Industry Median: vs. TPH: 7.31 )
TPH' s 10-Year ROE (%) Range
Min: 6.08   Max: 9.54
Current: 7.31

6.08
9.54
ROA (%) 4.77
TPH's ROA (%) is ranked lower than
100% of the Companies
in the Global industry.

( Industry Median: vs. TPH: 4.77 )
TPH' s 10-Year ROA (%) Range
Min: 1.61   Max: 4.25
Current: 4.77

1.61
4.25
ROC (Joel Greenblatt) (%) 13.15
TPH's ROC (Joel Greenblatt) (%) is ranked lower than
100% of the Companies
in the Global industry.

( Industry Median: vs. TPH: 13.15 )
TPH' s 10-Year ROC (Joel Greenblatt) (%) Range
Min: 2.76   Max: 9.92
Current: 13.15

2.76
9.92
» TPH's 10-Y Financials

Financials


Revenue & Net Income
Cash & Debt
Oprt. Cash Flow & Free Cash Flow

» Details

Guru Trades

Q3 2013

TPH Guru Trades in Q3 2013

Chuck Royce 154,908 sh (New)
Ken Heebner 130,000 sh (New)
Ron Baron 560,000 sh (+3.7%)
» More
Q4 2013

TPH Guru Trades in Q4 2013

John Keeley 1,770,578 sh (New)
Jim Simons 151,500 sh (New)
Ken Heebner 831,000 sh (+539.23%)
Chuck Royce 340,007 sh (+119.49%)
Ron Baron 362,027 sh (-35.35%)
» More
Q1 2014

TPH Guru Trades in Q1 2014

Chuck Royce 645,672 sh (+89.9%)
John Keeley 2,800,948 sh (+58.19%)
Ron Baron 362,027 sh (unchged)
Ken Heebner Sold Out
Jim Simons 125,500 sh (-17.16%)
» More
Q2 2014

TPH Guru Trades in Q2 2014

Manning & Napier Advisors, Inc 129,857 sh (New)
Paul Tudor Jones 33,300 sh (New)
Louis Moore Bacon 325,000 sh (New)
Murray Stahl 2,062,295 sh (New)
Chuck Royce 786,172 sh (+21.76%)
John Keeley 2,965,068 sh (+5.86%)
Louis Moore Bacon 100,000 sh (unchged)
Steven Cohen 2,577,000 sh (unchged)
Jim Simons Sold Out
Ron Baron Sold Out
» More
» Details

Insider Trades

Latest Guru Trades with TPH

(List those with share number changes of more than 20%, or impact to portfolio more than 0.1%)

GuruDate Trades Impact to Portfolio Price Range * (?) Current Price Change from Average Current Shares
Ron Baron 2014-06-30 Sold Out 0.02%$14.98 - $17.11 $ 13.78-15%0
Ken Heebner 2014-03-31 Sold Out 0.43%$16.26 - $19.93 $ 13.78-22%0
John Keeley 2014-03-31 Add 58.19%0.29%$16.26 - $19.93 $ 13.78-22%2800948
John Keeley 2013-12-31 New Buy0.6%$13.66 - $19.92 $ 13.78-20%1770578
Ken Heebner 2013-12-31 Add 539.23%0.36%$13.66 - $19.92 $ 13.78-20%831000
Ron Baron 2013-12-31 Reduce -35.35%0.01%$13.66 - $19.92 $ 13.78-20%362027
Ken Heebner 2013-09-30 New Buy0.05%$14.03 - $16.93 $ 13.78-10%130000
Ron Baron 2013-06-30 Reduce -35.77%0.03%$14.4 - $20.02 $ 13.78-23%540000
Ron Baron 2013-03-31 New Buy0.09%$17.97 - $20.51 $ 13.78-27%840768
Premium More recent guru trades are included for Premium Members only!!
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Guru Investment Theses on TRI Pointe Homes Inc

Murray Stahl’s Horizon Kinetics Comments on TRI Pointe Homes - Jul 25, 2014

TRI Pointe Homes (TPH) is a recent addition to some of our portfolios. It was founded in the depths of the Credit Crisis in 2009 by former homebuilding industry executives. Their objective was to acquire land lots in distressed regions, particularly in California and Colorado, which could be utilized for future home construction. TRI Pointe was certainly not alone. A number of companies led by astute investors acquired enormous amounts of land in heavily distressed areas such as California, Arizona, and Nevada.

In 2010, real estate investor Barry Sternlicht capitalized TRI Pointe with $150 million of equity through his Starwood Capital private equity fund. Mr. Sternlicht became Chairman of TRI Pointe and received roughly 39% equity ownership of the company. Given his real estate experience, it is not surprising that he chose a vehicle that will ultimately benefit from a sustained recovery in the residential housing market.

TRI Pointe drew upon the entire $150 million infusion, using the proceeds to acquire lots in California and Colorado. As a result, it expanded rapidly, increasing its revenues from $14 million in 2011 to $247 million in 2013.

While seemingly on a rapid growth trajectory, Mr. Sternlicht chose to accelerate the company’s expansion through the just-completed merger with the homebuilding operations of Weyerhaeuser (Weyerhaeuser Real Estate Company, or WRECO), which closed July 8th. WRECO’s homebuilding operations were considerably larger than those of TRI Pointe, such that in terms of revenues and market capitalization, TRI Pointe has become one of the ten largest homebuilders in the U.S.

The transaction was structured as an equity offering by TRI Pointe for the assets of WRECO, increasing the company’s shares outstanding from 31.6 million to 162.9 million; thus, the market capitalization has just expanded from less than $500 million to $2.5 billion. This could be an important catalyst for the shares, although not fundamental in nature whatsoever. TRI Pointe was rather illiquid, as Starwood owned nearly 40% of the shares outstanding, leaving a float-adjusted market capitalization of under $300 million. The enhanced trading liquidity could eventually attract the interest of the ETF index engineers.

Nevertheless, TRI Pointe is currently priced in a manner reflective only of present earnings power, not of its substantial land bank. That is, investors are unwilling to pay a premium for the vast optionality that exists in the company’s largest market, California. To illustrate, the consensus revenue estimate in 2015, which incorporates the contribution of WRECO, is $2.77 billion. Based on an historical average for the industry, TRI Pointe should manage to earn a profit margin of perhaps 7.9% in a reasonably robust housing market. This would create $219 million of net income, and a $2.6 billion market capitalization using a 12x p/e multiple. This is only slightly higher than the current pro forma market capitalization of $2.5 billion.

However, homebuilding activity in California is still 74% below the normal average in that state. A return to a normal level would entail construction activity more than three times the current rate. As over half of TRI Pointe’s land lots are in California, an eventual recovery in this market would have a great impact on its earnings. Moreover, broad construction levels in the U.S. are still well below normal levels. The addition of WRECO exposes TRI Pointe to other markets as well, such as Washington D.C. and Texas. The company therefore is positioned to participate in a much broader recovery.

Yet, given the fact that this presumed expansion in the company’s earnings cannot be precisely estimated, this optionality is being discounted by investors at a very high rate. To evidence this, based on the company’s own projections, WRECO as a standalone entity could produce over $200 million of net income by 2016. If investors were willing to pay a multiple of 12x this estimate, the resulting market capitalization of over $2.4 billion would about equal the current implied market capitalization of TRI Pointe. In other words, at this price one is not paying for the entire TRI Pointe stub business, which should report nearly $500 million of revenues this year.

Importantly, TRI Pointe has the benefit of a key intangible asset that does not appear on its financial statements and thus cannot be traditionally valued. Mr. Sternlicht is an experienced, well known, and serially successful real estate investor. He therefore has access to strategic information within the industry that the average executive does not. It appears that he is using TRI Pointe as a new investment vehicle.

From Murray Stahl (Trades, Portfolio)’s Horizon Kinetics Second Quarter 2014 Commentary.

Check out Murray Stahl latest stock trades

Top Ranked Articles about TRI Pointe Homes Inc

Murray Stahl’s Horizon Kinetics Comments on TRI Pointe Homes
TRI Pointe Homes (TPH) is a recent addition to some of our portfolios. It was founded in the depths of the Credit Crisis in 2009 by former homebuilding industry executives. Their objective was to acquire land lots in distressed regions, particularly in California and Colorado, which could be utilized for future home construction. TRI Pointe was certainly not alone. A number of companies led by astute investors acquired enormous amounts of land in heavily distressed areas such as California, Arizona, and Nevada. Read more...

Ratios

vs
industry
vs
history
P/E(ttm) 18.50
TPH's P/E(ttm) is ranked lower than
100% of the Companies
in the Global industry.

( Industry Median: vs. TPH: 18.50 )
TPH' s 10-Year P/E(ttm) Range
Min: 17.22   Max: 132.27
Current: 18.5

17.22
132.27
P/B 1.30
TPH's P/B is ranked lower than
100% of the Companies
in the Global industry.

( Industry Median: vs. TPH: 1.30 )
TPH' s 10-Year P/B Range
Min: 1.21   Max: 2.09
Current: 1.3

1.21
2.09
P/S 1.29
TPH's P/S is ranked lower than
100% of the Companies
in the Global industry.

( Industry Median: vs. TPH: 1.29 )
TPH' s 10-Year P/S Range
Min: 1.2   Max: 5.81
Current: 1.29

1.2
5.81
EV-to-EBIT 53.37
TPH's EV-to-EBIT is ranked lower than
100% of the Companies
in the Global industry.

( Industry Median: vs. TPH: 53.37 )
TPH' s 10-Year EV-to-EBIT Range
Min: 13.6   Max: 129.5
Current: 53.37

13.6
129.5
Current Ratio 2.14
TPH's Current Ratio is ranked lower than
100% of the Companies
in the Global industry.

( Industry Median: vs. TPH: 2.14 )
TPH' s 10-Year Current Ratio Range
Min: 2.14   Max: 5.07
Current: 2.14

2.14
5.07
Quick Ratio 0.11
TPH's Quick Ratio is ranked lower than
100% of the Companies
in the Global industry.

( Industry Median: vs. TPH: 0.11 )
TPH' s 10-Year Quick Ratio Range
Min: -4   Max: 1.78
Current: 0.11

-4
1.78

Valuation & Return

vs
industry
vs
history
Price/Net Current Asset Value 13.25
TPH's Price/Net Current Asset Value is ranked lower than
100% of the Companies
in the Global industry.

( Industry Median: vs. TPH: 13.25 )
TPH' s 10-Year Price/Net Current Asset Value Range
Min: 3.4   Max: 14.74
Current: 13.25

3.4
14.74
Price/Tangible Book 1.30
TPH's Price/Tangible Book is ranked lower than
100% of the Companies
in the Global industry.

( Industry Median: vs. TPH: 1.30 )
TPH' s 10-Year Price/Tangible Book Range
Min: 1.45   Max: 2.09
Current: 1.3

1.45
2.09
Price/Median PS Value 0.57
TPH's Price/Median PS Value is ranked lower than
100% of the Companies
in the Global industry.

( Industry Median: vs. TPH: 0.57 )
TPH' s 10-Year Price/Median PS Value Range
Min: 0.63   Max: 2.56
Current: 0.57

0.63
2.56
Price/Graham Number 1.04
TPH's Price/Graham Number is ranked lower than
100% of the Companies
in the Global industry.

( Industry Median: vs. TPH: 1.04 )
TPH' s 10-Year Price/Graham Number Range
Min: 1.16   Max: 3.88
Current: 1.04

1.16
3.88
Earnings Yield (Greenblatt) 1.90
TPH's Earnings Yield (Greenblatt) is ranked lower than
100% of the Companies
in the Global industry.

( Industry Median: vs. TPH: 1.90 )
TPH' s 10-Year Earnings Yield (Greenblatt) Range
Min: 0.8   Max: 7.4
Current: 1.9

0.8
7.4

Business Description

Industry: »
Compare: » details
Traded in other countries:T86.Germany
TRI Pointe Homes Inc is engaged in the design, construction and sale of single-family homes in planned communities in metropolitan areas located throughout Southern and Northern California, and Colorado.
» More Articles for TPH

Headlines

Articles On GuruFocus.com
Murray Stahl’s Horizon Kinetics Comments on TRI Pointe Homes Jul 25 2014 
Weekly 3-Year Low Highlight: GGB, XOOM, TPH, JCS May 21 2013 

More From Other Websites
TRI Pointe Homes to Host Third Quarter 2014 Earnings Webcast and Conference Call Oct 21 2014
TRI Pointe Homes to Host Third Quarter 2014 Earnings Webcast and Conference Call Oct 21 2014
ADDING MULTIMEDIA TRI Pointe Homes Southern California Promotes Tom Grable to Division President Oct 14 2014
Tri Pointe Homes (TPH) Downgraded From Hold to Sell Oct 03 2014
TRI POINTE HOMES, INC. Files SEC form 8-K, Other Events Sep 05 2014
TRI Pointe Expands National Presence with 649 New Lot Acquisitions for Seven New Communities Aug 18 2014
TRI POINTE HOMES, INC. Financials Aug 15 2014
Weyerhaeuser Hikes Dividend, To Buy back $700 Million Shares Aug 15 2014
TRI POINTE HOMES, INC. Files SEC form 8-K, Regulation FD Disclosure, Financial Statements and... Aug 12 2014
TRI POINTE HOMES, INC. Files SEC form 8-K, Results of Operations and Financial Condition, Financial... Aug 07 2014
Q2 2014 TRI Pointe Homes Inc. Earnings Release - Before Market Open Aug 07 2014
TRI Pointe Homes, Inc. Reports 2014 Second Quarter Results Aug 07 2014
TRI POINTE HOMES, INC. Files SEC form 8-K, Amendments to Articles of Inc. or Bylaws; Change in... Aug 06 2014
TRI POINTE HOMES, INC. Files SEC form 8-K/A, Completion of Acquisition or Disposition of Assets,... Aug 05 2014
Weyerhaeuser Company Posts Upbeat Q2 Earnings, Revenues Lag Aug 01 2014
TRI Pointe Homes to Host Second Quarter 2014 Earnings Webcast and Conference Call Jul 22 2014
TRI POINTE HOMES, INC. Files SEC form 8-K, Changes in Registrant's Certifying Accountant, Financial... Jul 11 2014
Is Bigger Better For Builder TRI Pointe? Jul 10 2014
TRI Pointe Appears Compelling After Absorbing Weyerhaeuser's Homebuilder Jul 10 2014
TRI Pointe Homes Announces Additions to Board of Directors Jul 10 2014

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