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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 : 6/10

vs
industry
vs
history
Cash to Debt 0.09
TPH's Cash to Debt is ranked lower than
86% of the 727 Companies
in the Global Residential Construction industry.

( Industry Median: 1.43 vs. TPH: 0.09 )
Ranked among companies with meaningful Cash to Debt only.
TPH' s 10-Year Cash to Debt Range
Min: 0.01  Med: 0.35 Max: N/A
Current: 0.09
Equity to Asset 0.49
TPH's Equity to Asset is ranked higher than
51% of the 493 Companies
in the Global Residential Construction industry.

( Industry Median: 0.49 vs. TPH: 0.49 )
Ranked among companies with meaningful Equity to Asset only.
TPH' s 10-Year Equity to Asset Range
Min: 0.42  Med: 0.53 Max: 0.8
Current: 0.49
0.42
0.8
F-Score: 3
Z-Score: 2.82
M-Score: 2.44
WACC vs ROIC
11.11%
6.35%
WACC
ROIC
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 : 4/10

vs
industry
vs
history
Operating margin (%) 10.76
TPH's Operating margin (%) is ranked higher than
83% of the 724 Companies
in the Global Residential Construction industry.

( Industry Median: 2.46 vs. TPH: 10.76 )
Ranked among companies with meaningful Operating margin (%) only.
TPH' s 10-Year Operating margin (%) Range
Min: -23.66  Med: -7.80 Max: 8.64
Current: 10.76
-23.66
8.64
Net-margin (%) 6.18
TPH's Net-margin (%) is ranked higher than
76% of the 725 Companies
in the Global Residential Construction industry.

( Industry Median: 1.82 vs. TPH: 6.18 )
Ranked among companies with meaningful Net-margin (%) only.
TPH' s 10-Year Net-margin (%) Range
Min: -23.76  Med: -4.27 Max: 4.94
Current: 6.18
-23.76
4.94
ROE (%) 9.89
TPH's ROE (%) is ranked higher than
65% of the 688 Companies
in the Global Residential Construction industry.

( Industry Median: 5.05 vs. TPH: 9.89 )
Ranked among companies with meaningful ROE (%) only.
TPH' s 10-Year ROE (%) Range
Min: -37.5  Med: 6.08 Max: 7.48
Current: 9.89
-37.5
7.48
ROA (%) 4.93
TPH's ROA (%) is ranked higher than
69% of the 738 Companies
in the Global Residential Construction industry.

( Industry Median: 2.14 vs. TPH: 4.93 )
Ranked among companies with meaningful ROA (%) only.
TPH' s 10-Year ROA (%) Range
Min: -14.05  Med: 1.61 Max: 3.49
Current: 4.93
-14.05
3.49
ROC (Joel Greenblatt) (%) 11.78
TPH's ROC (Joel Greenblatt) (%) is ranked higher than
65% of the 730 Companies
in the Global Residential Construction industry.

( Industry Median: 6.72 vs. TPH: 11.78 )
Ranked among companies with meaningful ROC (Joel Greenblatt) (%) only.
TPH' s 10-Year ROC (Joel Greenblatt) (%) Range
Min: -32.49  Med: 2.73 Max: 8.85
Current: 11.78
-32.49
8.85
» TPH's 10-Y Financials

Financials


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

» Details

Guru Trades

Q3 2014

TPH Guru Trades in Q3 2014

Ken Heebner 1,000,000 sh (New)
HOTCHKIS & WILEY 1,526,806 sh (New)
Murray Stahl 5,513,594 sh (+167.35%)
Louis Moore Bacon 800,000 sh (+146.15%)
Manning & Napier Advisors, Inc 286,371 sh (+120.53%)
Paul Tudor Jones 59,571 sh (+78.89%)
Chuck Royce 851,172 sh (+8.27%)
John Keeley 3,085,653 sh (+4.07%)
Steven Cohen 241,700 sh (-90.62%)
» More
Q4 2014

TPH Guru Trades in Q4 2014

NWQ Managers 2,387,164 sh (New)
David Einhorn 4,408,647 sh (New)
HOTCHKIS & WILEY 3,243,416 sh (+112.43%)
Steven Cohen 397,400 sh (+64.42%)
Ken Heebner 1,550,000 sh (+55.00%)
Chuck Royce 1,147,872 sh (+34.86%)
Murray Stahl 7,126,897 sh (+29.26%)
John Keeley 3,398,173 sh (+10.13%)
Steven Cohen 428,097 sh (+7.72%)
John Keeley 3,399,053 sh (+0.03%)
Manning & Napier Advisors, Inc 286,371 sh (unchged)
Paul Tudor Jones 39,220 sh (-34.16%)
Louis Moore Bacon 50,000 sh (-93.75%)
» More
Q1 2015

TPH Guru Trades in Q1 2015

Jim Simons 475,436 sh (New)
Steven Cohen 747,600 sh (+88.12%)
HOTCHKIS & WILEY 6,043,916 sh (+86.34%)
NWQ Managers 3,434,531 sh (+43.87%)
Manning & Napier Advisors, Inc 341,660 sh (+19.31%)
Murray Stahl 7,896,320 sh (+10.80%)
David Einhorn 4,786,061 sh (+8.56%)
Ken Heebner 1,670,000 sh (+7.74%)
Chuck Royce 1,227,872 sh (+6.97%)
John Keeley 3,513,435 sh (+3.39%)
Louis Moore Bacon Sold Out
Paul Tudor Jones Sold Out
» More
Q2 2015

TPH Guru Trades in Q2 2015

HOTCHKIS & WILEY 11,019,116 sh (+82.32%)
Jim Simons 578,436 sh (+21.66%)
NWQ Managers 4,057,694 sh (+18.14%)
Chuck Royce 1,232,872 sh (+0.41%)
Murray Stahl 7,901,035 sh (+0.06%)
David Einhorn 4,786,061 sh (unchged)
Ken Heebner 1,670,000 sh (unchged)
John Keeley 3,469,625 sh (-1.25%)
Manning & Napier Advisors, Inc 240,327 sh (-29.66%)
Steven Cohen 74,200 sh (-90.07%)
» 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%)

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Guru Investment Theses on TRI Pointe Group 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

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Ratios

vs
industry
vs
history
P/E(ttm) 18.18
TPH's P/E(ttm) is ranked lower than
59% of the 485 Companies
in the Global Residential Construction industry.

( Industry Median: 15.20 vs. TPH: 18.18 )
Ranked among companies with meaningful P/E(ttm) only.
TPH' s 10-Year P/E(ttm) Range
Min: 17.62  Med: 26.21 Max: 132.27
Current: 18.18
17.62
132.27
Forward P/E 8.83
TPH's Forward P/E is ranked higher than
63% of the 139 Companies
in the Global Residential Construction industry.

( Industry Median: 11.35 vs. TPH: 8.83 )
Ranked among companies with meaningful Forward P/E only.
N/A
PE(NRI) 19.50
TPH's PE(NRI) is ranked lower than
59% of the 482 Companies
in the Global Residential Construction industry.

( Industry Median: 15.10 vs. TPH: 19.50 )
Ranked among companies with meaningful PE(NRI) only.
TPH' s 10-Year PE(NRI) Range
Min: 19.07  Med: 26.03 Max: 130.23
Current: 19.5
19.07
130.23
P/B 1.42
TPH's P/B is ranked lower than
67% of the 608 Companies
in the Global Residential Construction industry.

( Industry Median: 0.95 vs. TPH: 1.42 )
Ranked among companies with meaningful P/B only.
TPH' s 10-Year P/B Range
Min: 0.67  Med: 1.59 Max: 2.09
Current: 1.42
0.67
2.09
P/S 1.12
TPH's P/S is ranked lower than
67% of the 712 Companies
in the Global Residential Construction industry.

( Industry Median: 0.65 vs. TPH: 1.12 )
Ranked among companies with meaningful P/S only.
TPH' s 10-Year P/S Range
Min: 1.08  Med: 1.55 Max: 5.81
Current: 1.12
1.08
5.81
EV-to-EBIT 15.99
TPH's EV-to-EBIT is ranked lower than
61% of the 497 Companies
in the Global Residential Construction industry.

( Industry Median: 13.28 vs. TPH: 15.99 )
Ranked among companies with meaningful EV-to-EBIT only.
TPH' s 10-Year EV-to-EBIT Range
Min: -16.8  Med: 21.85 Max: 129.5
Current: 15.99
-16.8
129.5
Current Ratio 4.03
TPH's Current Ratio is ranked higher than
85% of the 505 Companies
in the Global Residential Construction industry.

( Industry Median: 1.76 vs. TPH: 4.03 )
Ranked among companies with meaningful Current Ratio only.
TPH' s 10-Year Current Ratio Range
Min: 2.14  Med: 4.16 Max: 6.11
Current: 4.03
2.14
6.11
Quick Ratio 0.23
TPH's Quick Ratio is ranked lower than
95% of the 504 Companies
in the Global Residential Construction industry.

( Industry Median: 0.99 vs. TPH: 0.23 )
Ranked among companies with meaningful Quick Ratio only.
TPH' s 10-Year Quick Ratio Range
Min: -4  Med: 0.26 Max: 1.78
Current: 0.23
-4
1.78
Days Inventory 472.45
TPH's Days Inventory is ranked lower than
94% of the 686 Companies
in the Global Residential Construction industry.

( Industry Median: 78.85 vs. TPH: 472.45 )
Ranked among companies with meaningful Days Inventory only.
TPH' s 10-Year Days Inventory Range
Min: 306.1  Med: 503.62 Max: 779.88
Current: 472.45
306.1
779.88
Days Sales Outstanding 4.29
TPH's Days Sales Outstanding is ranked higher than
94% of the 626 Companies
in the Global Residential Construction industry.

( Industry Median: 47.94 vs. TPH: 4.29 )
Ranked among companies with meaningful Days Sales Outstanding only.
TPH' s 10-Year Days Sales Outstanding Range
Min: 1.34  Med: 2.29 Max: 2.55
Current: 4.29
1.34
2.55

Valuation & Return

vs
industry
vs
history
Price/Net Current Asset Value 1.99
TPH's Price/Net Current Asset Value is ranked higher than
64% of the 259 Companies
in the Global Residential Construction industry.

( Industry Median: 3.09 vs. TPH: 1.99 )
Ranked among companies with meaningful Price/Net Current Asset Value only.
TPH' s 10-Year Price/Net Current Asset Value Range
Min: 1.51  Med: 2.09 Max: 2.43
Current: 1.99
1.51
2.43
Price/Tangible Book 1.63
TPH's Price/Tangible Book is ranked lower than
70% of the 602 Companies
in the Global Residential Construction industry.

( Industry Median: 0.97 vs. TPH: 1.63 )
Ranked among companies with meaningful Price/Tangible Book only.
TPH' s 10-Year Price/Tangible Book Range
Min: 0.81  Med: 1.69 Max: 2.09
Current: 1.63
0.81
2.09
Price/Median PS Value 0.72
TPH's Price/Median PS Value is ranked higher than
81% of the 641 Companies
in the Global Residential Construction industry.

( Industry Median: 1.19 vs. TPH: 0.72 )
Ranked among companies with meaningful Price/Median PS Value only.
TPH' s 10-Year Price/Median PS Value Range
Min: 0.73  Med: 1.00 Max: 3.72
Current: 0.72
0.73
3.72
Price/Graham Number 1.14
TPH's Price/Graham Number is ranked lower than
64% of the 328 Companies
in the Global Residential Construction industry.

( Industry Median: 0.96 vs. TPH: 1.14 )
Ranked among companies with meaningful Price/Graham Number only.
TPH' s 10-Year Price/Graham Number Range
Min: 1.03  Med: 1.55 Max: 3.88
Current: 1.14
1.03
3.88
Earnings Yield (Greenblatt) (%) 6.19
TPH's Earnings Yield (Greenblatt) (%) is ranked higher than
58% of the 716 Companies
in the Global Residential Construction industry.

( Industry Median: 4.10 vs. TPH: 6.19 )
Ranked among companies with meaningful Earnings Yield (Greenblatt) (%) only.
TPH' s 10-Year Earnings Yield (Greenblatt) (%) Range
Min: 0.8  Med: 2.20 Max: 6.32
Current: 6.19
0.8
6.32

Analyst Estimate

Dec15 Dec16 Dec17
Revenue(Mil) 2,391 2,990 3,563
EPS($) 1.23 1.56 1.92
EPS without NRI($) 1.23 1.56 1.92

Business Description

Industry: Homebuilding & Construction » Residential Construction
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
5 Stocks Multiple Gurus Are Buying Mar 05 2015 
William Lyon Homes Bags Profits In Its Q4 Earnings Feb 24 2015 
TRI Pointe Homes Colorado Division Wins Three Awards at The Nationals Jan 28 2015 
Extended Hours at Barrington, Open Until 8 PM, This Weekend Only Nov 13 2014 
Buy Now Save Big at Barrington in Scenic Brentwood on Impressive Move-In Ready Homes Oct 30 2014 
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 GROUP, INC. Financials Aug 20 2015
TRI Pointe Homes Launches Living Smart Aug 17 2015
TRI POINTE GROUP, INC. Files SEC form 8-K, Change in Directors or Principal Officers, Financial... Aug 13 2015
Edited Transcript of TPH earnings conference call or presentation 10-Aug-15 2:00pm GMT Aug 12 2015
Edited Transcript of TPH earnings conference call or presentation 10-Aug-15 2:00pm GMT Aug 10 2015
TRI POINTE GROUP, INC. Files SEC form 8-K, Results of Operations and Financial Condition, Financial... Aug 10 2015
Tri Pointe beats 2Q profit forecasts Aug 10 2015
Tri Pointe beats 2Q profit forecasts Aug 10 2015
TRI Pointe Group, Inc. Reports 2015 Second Quarter Results Aug 10 2015
Q2 2015 TRI Pointe Homes Inc Earnings Release - Before Market Open Aug 10 2015
TRI Pointe Group, Inc. Reports 2015 Second Quarter Results Aug 10 2015
TRI Pointe Homes: There's Tons of Value Despite Recent Stock Decline Aug 07 2015
TRI Pointe Group Set to Join the S&P MidCap 400 Aug 06 2015
Tri Pointe Group, Inc. Announces Second Quarter 2015 Earnings Release and Conference Call Date Jul 08 2015
Tri Pointe Group, Inc. Announces Second Quarter 2015 Earnings Release and Conference Call Date Jul 08 2015
Winchester Homes Launches New Lending Service, TRI Pointe Connect, In Maryland And Virginia Jul 01 2015
TRI POINTE HOMES, INC. Files SEC form 8-K, Regulation FD Disclosure, Financial Statements and... Jul 01 2015
TRI Pointe Group Announces Closing of the Sale of the Pacific Highlands Ranch Employment Site Jul 01 2015
Quadrant Homes Recognized for Sixth Year in a Row as One of North America’s Customer Service... Jul 01 2015
Coverage initiated on TRI Pointe Homes by Gabelli & Co Jun 29 2015

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