HOV Investment Analysis Report & Stock Research, Hovnanian Enterprises, Inc.

Hovnanian Enterprises, Inc. (HOV)

HOV Stock Report

2-Year Price History

View Larger HOV Chart
NYSE:HOV
$3.64
(2/9 11:05AM)
Open$3.73 Mkt Cap$228.9 Million
High$3.74 52Wk High$5.75
Low$3.62 52Wk Low$0.52
Volume397,239 Avg Vol 10D2.4 Million

Ockham's Rating/Recommendation Summary

Rating specific information requires Premium Access.
Buy Now or Learn More about Ockham's Features and Services.

HOV Revenue

As a value investing shop, we are interested in seeing how HOV's revenues measure up against past performances. One easily understandable way of doing that is to compare Price to Sales per share levels over a given time frame. Assuming it is available, Ockham prefers to look at ten years of history (for this stock there are 10 years of history available) and we weigh recent years more heavily. This allows us to find weighted average historical high and low Price to Sales ratios, which give us a better idea of the stock's current underlying value. Using this method, we have established a high range for Price to Sales of 0.53x and the low end of the range at 0.18x.

With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for HOV of 0.17x is well below its normal historic Price to Sales levels. At a price of $3.55, HOV is 52% below where we would expect to see it. Clearly, this stock looks undervalued compared to historical levels, at least on a Price to Sales basis. This will positively affect our analysis because it is rare to find a stock this far below historical norms, and we would expect some price appreciation to bring this metric back towards a more normal range.

HOV Cash Earnings

HOV is not forecasted to produce positive Cash Earnings this year, based on recent performance. This is not a positive situation, as we would always prefer that a company is producing cash every year. However, it is important to recognize that not all companies or types of companies have the goal of producing positive Cash Earnings either early in their business cycle or following significant turnaround changes. When looking at HOV, we hesitate to be overly negative on the company, but it is of concern that the company is not profitable at this time. Let's face it, companies cannot remain unprofitable for very long before a change has to be made. This could mean further restructuring or corporate event such as selling assets or spinning off divisions, at any rate a company with negative cash flows is not one that often makes a great investment unless you can acquire it at an extremely depressed price.

HOV Dividends

When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for HOV to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis. While we do like to see companies with healthy and growing dividends, it is not appropriate for all companies, especially those focused on growth. In this regard, we regard HOV as neutral because we do not have historical data for this company's dividends. We will being incorporating this into our analysis as soon as that data is available.

Peer Comparison

:

Hovnanian Enterprises, Inc. Industry Grouping

(2/8/2010)
Company Ticker Market Cap (Ml) Latest
Price
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
5-Yr.
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not including HOV) 32.30 2.17 » 54.27 0.94 0.19 » 2.27 32.03% 9.98%
*10 year range does not include current year values
Matrix Service Company MTRX $248.1 Million $9.43 6.73 3.11 » 26.92 0.39 0.13 » 1.14 2.56% 11.58%
Trex Co Inc TREX $247.4 Million $16.08 124.77 2.45 » 163.23 1.00 0.23 » 3.78 11.50% 6.30%
Sterling Construction Company, Inc. STRL $241.4 Million $18.17 6.06 0.59 » 18.38 0.58 0.04 » 1.44 19.61% 15.06%
Hovnanian Enterprises, Inc. HOV $228.9 Million $3.64 -1.00 2.10 » 16.10 0.17 0.03 » 0.85 -17.44% 5.96%
United States Lime & Minerals, Inc. USLM $218.7 Million $34.49 8.73 1.55 » 13.49 1.88 0.36 » 2.73 25.76% 14.64%
Argan, Inc. AGX $207.8 Million $15.30 15.22 3.17 » 49.32 0.84 0.19 » 2.24 100.73% 2.33%
Ockham Coverflow

Sharpen Your Investing

  • Access to over 5,000 stock reports
  • Portfolio Analytics and Tracking
  • Business Television Tracking
  • CNBC and Fox Business Show Recaps
Get Started
The Latest Financial News
The most recent Stocks on Financial TV & Blogs from impactful financial news sources
Zero Hedge

Heard on Zero Hedge: CEO of HOV Discussed

Keeping up with a CEO is one way that we try to better understand the direction of a company, and there was talk about HOV management on Zero Hedge.

As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, HOV has been less covered in the news compared to the rest of our universe of stocks. The crowd at The Motley Fool does not like HOV and believes that it will Underperform. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on HOV.

“… 73%), and K HOVNANIAN ENTERPRISES, Inc. (+2. 59%) in the wideners, and Energy Future Holdings Corp. (-8. 08%), Eastman Kodak Co. (-7. 22%), and Belo Corp (-5. …”

Squawk On The Street

Hovnanian Enterprises, Inc. (HOV) Discussed on CNBC's Squawk On The Street

Hovnanian Enterprises, Inc. is in the news. Find out how this impacts HOV trading on Ockham Research.

Goods number. That's a little bit of an extra down side for the market here. Take a look at some of the home builders, your hov nanians and lennar's. The story today is the

“… Goods number. That's a little bit of an extra down side for the market here. Take a look at some of the home builders, your hov nanians and lennar's. The story today is the …”

View All Hovnanian Enterprises, Inc. Stock News

Key Fundamentals

HOV - Hovnanian Enterprises, Inc. Fundamentals
Price (2/9 11:05AM) $3.64
Volume (2/9 11:05AM) 397,239
Last Close Price $3.64
10 Day Average Volume 2.4 Million
13 Week Price Range $3.46 - $4.43
52 Week Price Range $0.52 - $5.75
LTM Revenue $1.6 Billion
 
Shares Outstanding (10/2009) 77.4 Million
Market Capitalization $228.9 Million
Shares Held By Institutions 20.5 Million
Institutional Holders 118
% Shares Held By Institutions 32.80%
Earnings Per Share (EPS) ($9.16)
P/E Ratio n/a
Book Value Per Share
 
Gross Margin -33.40%
Annual Dividend 0.00
Dividend Yield 0.00%
Beta 3.10
Fiscal Year Ends October

About Hovnanian Enterprises, Inc.

Hovnanian Enterprises, Inc. is considered to operate in the Industrial Goods sector. They specifically operate in the Residential Construction business segment contained within the Materials & Construction industry.

The Company designs, constructs, markets and sells single-family detached homes, attached townhomes and condominiums, mid-rise and high-rise condominiums, urban infill and active adult homes in planned residential developments.