Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
Hovnanian Enterprises's Sloan Ratio for the quarter that ended in Jan. 2024 was -4.59%.
As of Jan. 2024, Hovnanian Enterprises has a Sloan Ratio of -4.59%, indicating the company is in the safe zone and there is no funny business with accruals.
Hovnanian Enterprises Sloan Ratio % Historical Data
The historical data trend for Hovnanian Enterprises's Sloan Ratio % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Hovnanian Enterprises's Sloan Ratio %
For the Residential Construction subindustry, Hovnanian Enterprises's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Hovnanian Enterprises's Sloan Ratio % Distribution in the Homebuilding & Construction Industry
For the Homebuilding & Construction industry and Consumer Cyclical sector, Hovnanian Enterprises's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Hovnanian Enterprises's Sloan Ratio % falls into.
Hovnanian Enterprises Sloan Ratio % Calculation
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
Hovnanian Enterprises's Sloan Ratio for the fiscal year that ended in Oct. 2023 is calculated as
Hovnanian Enterprises's Net Income for the trailing twelve months (TTM) ended in Jan. 2024 was 34.146 (Apr. 2023 ) + 55.764 (Jul. 2023 ) + 97.265 (Oct. 2023 ) + 23.904 (Jan. 2024 ) = $211 Mil.
Hovnanian Enterprises's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jan. 2024 was 97.213 (Apr. 2023 ) + 225.632 (Jul. 2023 ) + 143.676 (Oct. 2023 ) + -89.004 (Jan. 2024 ) = $378 Mil.
Hovnanian Enterprises's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jan. 2024 was 2.821 (Apr. 2023 ) + -57.96 (Jul. 2023 ) + 0.18 (Oct. 2023 ) + -4.121 (Jan. 2024 ) = $-59 Mil.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Hovnanian Enterprises (NYSE:HOV) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Jan. 2024, Hovnanian Enterprises has a Sloan Ratio of -4.59%, indicating the company is in the safe zone and there is no funny business with accruals.
Hovnanian Enterprises Sloan Ratio % Related Terms
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Hovnanian Enterprises (Hovnanian Enterprises) Business Description
Hovnanian Enterprises Inc conducts all of its homebuilding and financial services operations . The company designs, constructs, markets, and sells single-family detached homes, attached townhomes and condominiums, urban infill, and active lifestyle homes in planned residential developments. It has two distinct operations: homebuilding and financial services. Its homebuilding operations are divided geographically into three segments; Northeast which includes Delaware, Maryland, New Jersey, Ohio, Pennsylvania, Virginia and West Virginia; Southeast which includes Florida, Georgia and South Carolina; and West which includes Arizona, California and Texas. The firm generates maximum revenue from West Segment.
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