Toll Brothers Home Builders- crushed earnings
- Thread starter GON
- Start date
This isnt correct.
You can easily list a home with a full service broker for 5%. Ive been in real estate for many years during the height of the market starting in 1998 with a major firm in the NY metropolitan area, bragging rights to in any given year the top 50 agents out of over 5000 best year was much higher than that.
(retired now) We just last month sold our home in our new state for the last 16 years with a national company.
The commission would have been 5% but I told them I wanted to pay 5.5% which offers a 3% commission to the selling agent and 2.5 to the listing agent. The 3% offering to a selling agent provides a nice incentive to experienced agents to bring people to your home.
This was a full MLS listing, complete with incredible professional photographic tour, pre-inspections on the HVAC systems and Termite inspection to offer to a buyer. They picked up the cost for those too.
Ok, so we have 5.5% commission and less than .5% in seller closing costs (that is correct less than 1/2% in fees), so total seller costs and other fees to us was 6% of the selling price, not close to 10% that would be insane in any place in the USA.
Our house sold at the highest price in the area, listed it on a Friday, jam packed with showing over the weekend, we signed contracts that Monday morning. Multiple offers, took the best one for us.
That's true-but if you bought a house in Southern California (or a handful of other places) in the last several years, you now have a property worth 1 million dollars-and the equity to go with it-assuming you didn't pull the cash out.
That may be true but as I stated it takes 2 (pretty good ) incomes to buy a home and that has repercussions like the one's I stated. When my parents bought their 1st home my mother was a stay at home mom....they paid $53,000 in 1972....that home is now in the $800,000 range....ridiculous....especially since that Bronx neighborhood is far less safe than it was in 1972.
Im from Long Island, born raised spent over 4 decades there before I got out.
People felt bad for us when we bought our first home on Long Island for $140,000. 1.5 baths, 3 bths and needed a lot of work. Even the real estate agent said to us (and I will never forget this) I feel bad for young people today (1988!!!!), the prices are so crazy and so little available.
Well that was back around 1988 and the same holds true today even though that house would be 500,000+ today if it needed a lot of work, if not add another $100,000 to the price, everyone is still living in those homes and everyone is still buying them, in fact its a bargain on Long Island right now to be close in on Long Island as well as close to the beaches ect.
It's all relative to what the public can pay or the homes would have no one living in them. It's all a choice. Just because your parents home is $800,000 now means the public can afford it and for people who cant afford it, they have to move out of the area. Throughout history its aways been this way. Two people working households are a lifestyle choice, not a requirement unless they want the specific area.
Not to sound cold but it's just a fact of life all around the world. You either can afford something or not and you either decide to sacrifice to afford something, such as both people working, driving used cheap cars, cheap phones, cheap furniture or you sacrifice moving to a place or state that you can afford it.
Social media has some people, the minority by far (by choice) living in constant misery instead of just dealing with life reality and moving forward to achieve.
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Reading good portions of the report and investor call, I'm not sure I'd use Toll as a bellweather of overall homebuilding.
Of note, they still have a significant backlog of orders on the books, with average time to delivery of 16 months. That is part of them being a build to order homebuilder... They make a point of noting their customers are wealthier and less price and interest rate sensitive to the average homebuilder. However, their cancellation rate in the 4th quarter is now up to 2.9%, which is a 38% increase in cancellation rate over their 10 year average...
New bookings in the 4th quarter were significantly down, but they downplay that by noting traffic to their models/sales facilities was only down by 15% in the quarter...
They've exited significant landholdings and options, and are looking to increase their spec building program above where it has been (in their words, they earn higher profit on spec builds), but read between the lines and they are working to stay busy and build inventory to sell later with the hopes interest rates come down (they are looking for 5%). Several investors are noting that things could go off the cliff for them in 2024...
Of note, they still have a significant backlog of orders on the books, with average time to delivery of 16 months. That is part of them being a build to order homebuilder... They make a point of noting their customers are wealthier and less price and interest rate sensitive to the average homebuilder. However, their cancellation rate in the 4th quarter is now up to 2.9%, which is a 38% increase in cancellation rate over their 10 year average...
New bookings in the 4th quarter were significantly down, but they downplay that by noting traffic to their models/sales facilities was only down by 15% in the quarter...
They've exited significant landholdings and options, and are looking to increase their spec building program above where it has been (in their words, they earn higher profit on spec builds), but read between the lines and they are working to stay busy and build inventory to sell later with the hopes interest rates come down (they are looking for 5%). Several investors are noting that things could go off the cliff for them in 2024...
My dad paid $190K for a new house in 1988 (it was a model home) in Manassas, Virginia. If you don't know about that place, it's where John Bobbitt lost his body part.
Not a particularly good place to live, then or now. But the prices remain high, primarily due to the Federal employment.
^^ yes I remember ^^ *LOL* Hey we had Amy Fisher scandal incredibly close by.
A few years before Bobbitt, Manassas also had a guy named "High Test". He made the paper a few times. He was usually stoned out of his mind from huffing gasoline.
In addition to that, this guy came from Manassas too. His fame came a few years after Bobbitt: https://en.wikipedia.org/wiki/Paul_Warner_Powell
I think few places outside of perhaps Florida have the collection of criminals, druggies, misfits and weirdos that Manassas, VA does.
GON
$100 Site Donor 2024
Wall Street is pretty wise at reading released reports and knowing what the future is. Not always, but more often than not.
Zacks indirectly concurs with your assessment:
Is Toll Brothers (TOL) A Buy Following Q4 Earnings Announcement?
The popular homebuilder beat on both the top and bottom lines.
These institutional holders may not holistically concur with your assessment:
| Holder | Shares | Date Reported | % Out | Value |
|---|---|---|---|---|
| Vanguard Group, Inc. (The) | 11,699,298 | Sep 29, 2022 | 10.32% | 578,647,268 |
| Blackrock Inc. | 10,553,295 | Sep 29, 2022 | 9.31% | 521,965,961 |
| Greenhaven Associates, Inc. | 5,359,803 | Sep 29, 2022 | 4.73% | 265,095,851 |
| Massachusetts Financial Services Co. | 4,771,255 | Sep 29, 2022 | 4.21% | 235,986,267 |
| Capital International Investors | 4,456,747 | Sep 29, 2022 | 3.93% | 220,430,702 |
| State Street Corporation | 3,697,727 | Sep 29, 2022 | 3.26% | 182,889,574 |
| Dimensional Fund Advisors LP | 3,663,819 | Sep 29, 2022 | 3.23% | 181,212,484 |
| Capital World Investors | 3,244,217 | Sep 29, 2022 | 2.86% | 160,458,969 |
| Bank Of New York Mellon Corporation | 3,019,933 | Sep 29, 2022 | 2.66% | 149,365,883 |
| JP Morgan Chase & Company | 2,027,961 | Sep 29, 2022 | 1.79% | 100,302,949 |
I lived in the north Bronx on the Westchester border...I worked in the south Bronx which was burning down and crime ridden,,,,,that phenomenon has moved north even into Westchester....Actually my father did pretty good back then.
What's actually happening in my old neighborhood is that recent home buyers are turning their basements and attics into (illegal) apartments in order to pay their mortgage. They are getting huge rents for those apartments too.
When I was a kid still living at home my parents payed 3.5x my dads annual salary for their last home, when I bought my first home 15 years later I payed 4.5x My annual salary, when my son bought his first house he payed 5x the combined salary of he and his wife. My parents last house was a large 5 bedroom, mine was a smallish 4 bedroom and my sons is a 3 bedroom. It seems to me affordability is going down. On the other hand my parents never owned more than 1 car at a time, my wife and I had a new car and used one and my son has 2 new and 1 used so go figure.
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No idea if they are a good stock to own or not, but Blackrock and Vanguard are the two largest ETF managers - meaning that they are required to hold TOL as part of their customers ETF's for the S&P400 midcap ETF's and Russel index's. Could also be a pretty big portion for State Street, Bank of NY Mellon, and JP Morgan, not sure.Wall Street is pretty wise at reading released reports and knowing what the future is. Not always, but more often than not.
Zacks indirectly concurs with your assessment:
Is Toll Brothers (TOL) A Buy Following Q4 Earnings Announcement?
The popular homebuilder beat on both the top and bottom lines.finance.yahoo.com
These institutional holders may not holistically concur with your assessment:
Holder Shares Date Reported % Out Value Vanguard Group, Inc. (The) 11,699,298 Sep 29, 2022 10.32% 578,647,268 Blackrock Inc. 10,553,295 Sep 29, 2022 9.31% 521,965,961 Greenhaven Associates, Inc. 5,359,803 Sep 29, 2022 4.73% 265,095,851 Massachusetts Financial Services Co. 4,771,255 Sep 29, 2022 4.21% 235,986,267 Capital International Investors 4,456,747 Sep 29, 2022 3.93% 220,430,702 State Street Corporation 3,697,727 Sep 29, 2022 3.26% 182,889,574 Dimensional Fund Advisors LP 3,663,819 Sep 29, 2022 3.23% 181,212,484 Capital World Investors 3,244,217 Sep 29, 2022 2.86% 160,458,969 Bank Of New York Mellon Corporation 3,019,933 Sep 29, 2022 2.66% 149,365,883 JP Morgan Chase & Company 2,027,961 Sep 29, 2022 1.79% 100,302,949
Greenhaven is a hedge fund so obviously they like the stock. The rest I don't recognize so no idea
As was pointed out, without knowing why those investors have the funds there, tough to say they know what they are doing. Toll being a part of certain indices that funds mimic being one of them... saying that as an owner of some shares in a fund that for that exact reason has Toll in it...
Reality of stocks is their movement doesn't always match the reports... (Game stop anyone...) It's like a popularity contest, but the reality is even the smart investors get it wrong - read about many of them in reporting from many of the funds I own....
Reality of stocks is their movement doesn't always match the reports... (Game stop anyone...) It's like a popularity contest, but the reality is even the smart investors get it wrong - read about many of them in reporting from many of the funds I own....
GON
$100 Site Donor 2024
The stock has had two trading days to allow exits at the seven percent run up 48 hours ago after earnings release. Yet the stock kept it's gains after release of earnings and forecast.
Stocks are often priced on the future, not their past, or even current. A seven percent price increase on a mid cap after earnings release, in a sector getting brutal press, likely implies people much smarter than me feel quite good about roll brothers forecast.
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