2024-01-29 02:40:34 ET
Summary
- Tri Pointe Homes has seen a decline in revenue, profit, and cash flow, but leading indicators suggest a positive future for the company.
- Despite weak financial performance, The Company has experienced a significant increase in net new orders, indicating strong demand in the housing market.
- The housing market is still recovering from the shortage caused by the 2007/2008 financial crisis, and TPH is well-positioned to benefit from continued strong net new orders and pricing.
Over the last year or so, one of the most interesting aspects of the market has been the home building space. Late in 2022, I found myself taking a rather bearish stance on the industry because of the impact of inflationary pressures and rising interest rates on home demand. But for many of the companies, I was neutral or even bullish. Despite declining backlog and rising cancellation rates, my view is that the long-term picture for the housing market was positive. And that led me to be drawn to home builders that were trading at rather low multiples....
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Tri Pointe Homes: Despite Nearly Doubling, Shares Offer Further Upside