NYSE:CTX
$12.10
(8/14 4:05PM)
-2.3%
| Open | $12.4 |
Mkt Cap | $1.5 Billion |
| High | $12.43 |
52Wk High | $18.71 |
| Low | $11.79 |
52Wk Low | $4.91 |
| Volume | 3.4 Million |
Avg Vol 10D | 4.7 Million |
Ockham’s Rating
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CTX Revenue
As we have often noted, in our valuation methodology, "Cash is King." Well, it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company’s stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, CTX the high and low end of the Price to Sales per share ratios are 0.62x and 0.28x respectively.
Notice that CTX’s current Price to Sales per share ratio is 0.23x, which is quite a bit below what we consider a normal Price to Sales ratio for this stock. Given normal conditions and a price of $12.10, CTX is 50% below where we would expect to see it. This will beneficially factor into our final analysis of CTX as it is not often that this stock sinks to these levels.
CTX Cash Earnings
CTX 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 CTX, 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.
CTX Dividends
A positive Ockham rating does not require a company to pay out an inviting dividend or a dividend at all. However, we believe dividends provide a useful measure of a company’s inherent expectations.
“…He writes would any of the traders be looking at lows ahead of results next week.E karen? >> I think lowe’s is lukewarm. The p/e is expensive. If you want to be in the home builder space, CENTEX would be >> time to highlight the best calls of the week. The heat is on >> as the scorching summer rally turned into a month-long heat wave, the "fast money’s" traders hottest trade kept you quicker >> i’m worried most about aluminum going up and I think it’s a great-looking chart. I own alcoa and I do. >> the ambassador seeing a move afoot in alcoa. As the price of aluminum jumped alcoa followed jumping 10%. >> I think the CENTEX/pulte merger was a watershed event. Two guys with strong balance sheets coming together. Several months of positive data coming in, I am long CENTEX. >> shares of CENTEX up 10% after a competitor saw net contracts for new homes climb for the first time in four years. >> this is one of the names that I think you have to own it, it’s not a crowded trade. What you want to avoid in this it is in the scenes what is much better than wells showed today. >> the liquidator calling a bounce on u.S. Bank korpcorp. >> and finally? Some guys have all the luck >> the negotiator still managing to make you money while on vacation. …” – CTX on Fast Money
“…Sarah lee, nairoedrrowed the fourth quarter loss and toll brothers and macy’s as well. Take a look at changes in the s&p 500. Pulte homes is acquiring sencentex, you’ll have CENTEX out of the s&p 500 and fmc is going in. As you know, portfolio managers like to stock up on stocks that are going into the major averages because they follow the indexes, so, keep an eye on fmc corporation, tacking on to gains from yesterday. The retail numbers, macy’s the rest of the week we’re certainly going to be getting a lot more from kohl’s, wal-mart, j.C. Penney, abercrombie & fitch, a lot to digest, including what we’ll be hearing from the fomc this afternoon. Brian and dagen, back to you. >> brian: nicole, thank you so >> dagen: wall street and main street, and everybody in between …” – CTX on Fox Business
“…Fifth straight month of gains in is the bottom in? >> I think the bottom is in. >> really? >> i’ve said it before, I think the CENTEX merger was a watershed event. You had two guys with strong balance sheets coming together. They didn’t know exactly when it would bottom, but we’ve been seeing now not just one piece of data. We’ve been seeing several months of positive data coming in. So, I am long CENTEX. I actually think the bottom — >> I think she’s on to something my hedge funds feel the same the permanent bears are always going to be bears. These guys feel that the bottom is in, we’re starting to firm up. …” – CTX on Fast Money
“…vs. $279M. Sees Q3 sales up 4-8% sequentially. (PR) Axis Capital (AXS): Q2 EPS of $1.22 beats by $0.05. Revenue of $781M (-4%) vs. $747M. (PR) CENTEX (CTX): Q2 EPS of -$2.63 misses by $1.46. Including tax benefit, reported EPS of $0.68. Revenue of $574M (-49%) vs. $563M. (PR) Chesapeake Energy (CHK): Q2 EPS of $0.62 beats by $0.11. Revenue of $1.7B vs. $1.9B. (PR) Comstock Resources (CRK): Q2 EPS of -$0.26 in-line. Revenue of $65M …” – CTX on Seeking Alpha Wall St Breakfast
“…CENTEX Corp. (CTX) reported an EPS from continuing operations of $.68, but the results were greatly improved by a $3.31 per share tax benefit. Revenue was down 49% overall, and 47% in the home building operations. Analysts had been predicting a loss of $1.17 on revenue that expectation was for a 50% drop from last year. Technically, CENTEX beat estimates and after surging at first, shares are settling right about even in after hours trading. Cost cutting saved the day yet again as the company said that it was able to lower SG&A costs by a whopping 47% or $135 million, the company reported net income of only $85 million in the quarter. So, without the extreme cost cutting CENTEX would have certainly lost money in the quarter, even with the huge tax gain. CENTEX has entered into a definitive agreement with Pulte Homes (PHM), which would have Pulte acquire all of CENTEX shares for .975 of PHM for each 1 share of CENTEX. At the time, the merger was valued at $3.1 billion, including $1.8 billion of debt. Also, this deal represented a 32.6% premium to the 20-day volume weighted average price. Since April 8th when the two firms announced this agreement, it is not surprising that the stocks have traded …” – CTX on The Razor’s Edge
“…proposed merger. If accepted Pulte shareholders would own 68% of the company, while CENTEX owners would get 32%. Over the last quarter, it appears CENTEX tried to make themselves as attractive to Pulte as possible. As discussed earlier, they slashed costs and tried to horde as much cash as possible to lessen the impact of the debt that the combined company would incur. They know these results will be fresh on the minds of both shareholders voting in two weeks. According to our methodology both CENTEX and Pulte are Overvalued at this time, there has been simply too much destruction to earnings and revenue for us to stand behind either of these companies at this point. We are starting to see some really positive signs that housing is stabilizing, but in our view there are certainly more attractive stocks in this market. It is an interesting spot to be in for the shareholders of CENTEX. CENTEX easily beat what the street had called for, and in the process was able to generate positive cash flow from home building operations, and yet the stock has not moved in after hours trading after an initial spike. The reason is that Pulte also reported earnings that did not meet earnings …” – CTX on The Razor’s Edge
“…Pulte rising higher over the next two weeks after an uninspiring quarter, I would probably drop the shares now. Especially if, as an owner of CENTEX, you think there is a chance that the merger will not be approved by Pulte shareholders, thus removing the 32% premium. CENTEX: Trying to Stay Attractive to Pulte …” – CTX on The Razor’s Edge
“…Sales jumped 11% in june compared to the prior month and this is the third straight monthly increase. Take a look at the home builders here, lennar, hovnanian, CENTEX and ckb and putty home. All 9% gainers plus and manning up in the big house, suspected …” – CTX on Countdown to the Closing Bell
“…I would be in there buying syntex. These numbers show that region >> now, let me ask you this, you’re really just talking about CENTEX but none of the others?E >> the midwest increase was the whole group has been on a but I think you have this cat laft of august 18th closing of the deal. Sin CENTEX has been the midwest builder. I think it’s a closing moment >> let’s link to that and go straight to financials.Q capital one, what’s going on >> i’m seeing two things going capital one had a gigantic rebound. …” – CTX on Street Signs
“…Expecting to earn money until >> that’s a long time. >> buying back land at cheaper prices after having taken it off of their balance sheet. I think there’s going to be I owned CENTEX before I started to write for thestreet.Com and they got taken out. I expect there’s going to be that activity in the sector as well. Have to tell you, it was very, …” – CTX on Mad Money
“…Remember, housing is a business that’s a lot of ceos who are founders and it comes down to I think the CENTEX merger was an aberration and not setting tone for what you’ll see typically over the next couple of years. >> thank you. David sabre and steven, thank you. …” – CTX on Squawk On The Street
“…Some of the builders, a mix, lennar, and who’ve nanian and CENTEX down on the down draft. Cnbc’s diana olick joins us from washington with the details on the latest case-shiller report. >> it shows that the home prices nationwide are getting less worth. But have they hit bottom yet? …” – CTX on Power Lunch
“…Of weeks. Home builders were moving higher. Not today. We have hovnanian, kren tex, d.R. More — CENTEX and d.R. Horton losing 4 to 10%. I need to know what the traders are talking about, nicole petallides, as far as why we saw a fall of 40 points in the last hour. >> the pressure is on the …” – CTX on Countdown to the Closing Bell
“…5%, 5.5%. They’re all over the map. Most analysts think that this could add a couple of percentage >> hang on. Look at that chart. >> is that the CENTEX? >> that’s the sensex. It’s like a straight line up. >> 2% in gdp growth in — >> but they had 9%? Better than 9% last year. …” – CTX on The Call
“…Corporation, upgraded by citigroup to a buy rating, saying that that stock trades at a 50% discount to its peers, but peers still up on the heels of that upgrade today, CENTEX, d.R. Horton among them all in the green and the financials, some traders arguably will say this is the hottest trading sector this morning as far as volume is concerned, there’s a lot of trading activity in the …” – CTX on Fox Business
“…Be in, then pulte is a good way they’ve got a nice balance sheet, a lot stronger than some >> pulte got pummeled. Shares down 18%. >> I actually recall being more bullish on CENTEX, but that’s also down just as much. It wouldn’t have made any difference whatsoever. I was wrong, down 16% on the there’s no other explanation >> next up, the ambassador set …” – CTX on Fast Money
“…>> yes how do you play it? Buy homebuilder stocks. >> no you don’t. Do not buy homebuilder stocks. Neil: homebuilder stocks would you buy. >> buy CENTEX or you can buy etf, shb. Homebuilders –. Neil: buy them starting now? >> sure. Neil: jonathan, what do you >> neil, hard to trust the …” – CTX on Cavuto
“…Builders. That’s got to send you looking it did to me. Pulte, d.R. Horton and CENTEX. The company had a $2.02 share loss when all was in. Not really comparable, not really positive. I saw some positive things with their numbers. Their new orders were up quarter …” – CTX on Power Lunch
“…That’s about half a percent loss there. CENTEX is down one cent, almost straight ahead, apple and google share two direct torns their respective boards including google ceo eric schmidt. The feds are investigating the is there something wrong with …” – CTX on Power Lunch
“…>> here’s the power play on some of the top home builders, a sector that’s been rallying this week on encouraging data. Merger partners pulte and CENTEX will separately report their first quarter earnings. And sales figures likely will be focused on in particular . …” – CTX on Power Lunch
“…Getting much better prices. Why a retailer, not a home builder? Because one, the home builders have really run. Two, more of a need to merge than just pulte and CENTEX. These are crummy stocks all. Research in motion still hot. Still very right. …” – CTX on Mad Money
“…We could look back a couple years from now and say that was it, that was the absolute bottom when those two merged. >> and combining the two points-f you look at an etf and CENTEX is in it that would be a but after the just pounding that we’ve had all across the equity spectrum a lot of these etfs have basically a few good stocks and a bunch of garbage. Those are the ones you want to stay away from. So don’t buy the etf, buy the CENTEX, the company leaders — >> do the homework. You’ve got to do the homework. From homes to auto sales, new auto sales plunging, but one area look like credit kras is a winner. …” – CTX on Fast Money
“…Individual stocks, that’s great. But if you want to play individual stocks, no reason to be in an etf. You get 25, 30 stocks, you want that’s my view. >> I bought a little CENTEX the day they announced their deal two of the biggest players coming together. I’m wondering is that in fact a sign of the bottom. They’re going to control an awful lot of real estate lots. We could look back a couple …” – CTX on Fast Money
“…Mentioned at the top of the show, merger monday, another multi-billion dollar deal today, wellpoint prescription business. Last week, home builders, pulte and CENTEX announced a deal are all of these mergers a good david, I can just remember being, when I was on wall street and we would walk in on monday morning and all of the deals it was, you know, it was like, …” – CTX on The Opening Bell on Fox Business
“…We had the big ims report about $4 trillion in toxic assets. We have the sun/ibm fall apart. >> and pulte CENTEX teaming pup. So the market has magd to dodge despite a couple of days down. >> it’s been light trading …” – CTX on Squawk Box
“…Already accepted government and taxpayer money in some form or. Who else is asking for, has asked for some help? They famously sort of ask we’ll see if pulte, CENTEX take that off the table. Merges real estate. Gotten help through the talf program. But they want loan terms to be changed to five years. That is kind of an adjust of some help they have already …” – CTX on America’s Nightly Scoreboard
“…Way higher, as it did today, we need companies to blink. Today we got a lot of blinking. And we see what happens. We get higher prices. Who blinked? How about CENTEX? Texas home builder. They blinked. This strong-willed company gave up, just capitulated right into the arms of pulte home. Something we are absolutely …” – CTX on Mad Money
“…Rebecca: your "trades to wake up to" keep a long-term view on CENTEX and pulte homes they will be the last men standing together the home building sector. >> within the next two years it will be at o . …” – CTX on Happy Hour
“…Stocks earnings sort of go up with inflation relatively somewhat to discount that [buzzer] stay away from the stocks in a bear market. That’s the point. Thm and CENTEX. Pulte homes and CENTEX two plus two equals zero, guys. Pull see, CENTEX, I mentioned this earlier come out bragging billions of dollars. Literally the report I saw on bloomberg, somewhere, we won’t need cash now. We have won’t need banks was yes they do. …” – CTX on Happy Hour
“…But it also could in one way be interpreted as a sign of I mean, the premium that was — >> desperation. >> the premium that was paid for CENTEX wasn’t that great and by the time the stocks had closed the combined entity actually lost 4% of its value from and that’s not even taking into account the synergies they’re in one way you could take it as a sign that maybe the housing market is going to continue to >> what do you see when you take …” – CTX on Fast Money
“…Creators and destroyers of >> other than that, mrs. >> that’s another show. Your playbook for the rest of trade number one here, today as nounsment that pulte homes will merge with CENTEX in a billion-dollar deal sent home building stocks soaring as traders saw it as one more sign that house may be nearing a tim eller, ceo of CENTEX, seemed to agree. >> we’re not necessarily calling a bottom to the industry. We do think we’re close to that, and we think this combination provides an accelerated return to profitability, which frankly >> ooh. …” – CTX on Fast Money
“…Pulte homes I call them both three. Well, my turn. I actually believe that some of these homebuilders will not be only be surviving but survive very well. I think I think pulte-CENTEX home will talk about later in the show will be crucial to the market you will have a few homebuilders surviving. They will be bee home not. They are stocks overbeaten, oversold. …” – CTX on Happy Hour
“…Already 19 million units of aka, lots and lots and lots of unoccupied homes out there, driving down prices. The point is, that pulte, CENTEX’s deal is okay news for the housing market but fundamental problems facing both these companies. Too few home buyers. Too many homes and too many …” – CTX on Happy Hour
“…S&p in the green by nine points. Top shelf for you on "happy hour", today’s billion dollar stock for stock deal between pulte for CENTEX sounds great for housing but is it really. All sorts of small builders can put up houses here on they continue to add to a …” – CTX on Happy Hour
“…Wall street. Everyone talked about buying CENTEX, as a result up 20%. It was the insurers that stole the light in the morning, the spotlight, many up more than they pulled back since this morning, but still. …” – CTX on Countdown to the Closing Bell
“…20% rise in the stock today. Number four, CENTEX. Many say they are pulling assets to pay offoff debt. Call it what you want. …” – CTX on Countdown to the Closing Bell
“…Builders joining forces with the hope of creating the perfect house. As the industry tries to ride out the housing slump. Sandra smith now on what will be the nation’s biggest home builder if CENTEX and pulte make a marriage. >> good, bad and ugly coming out of the deal. The market initially loved it. If you look at the stock, CENTEX, the deal values the shares at $10.50 a share. 38% premium. …” – CTX on Countdown to the Closing Bell
“…One group that is hot, look at home builders. Doing well, on the news deal. Traders love the deals. Pulte buying CENTEX. Look at the retailers. Target has been a big winner on the fox 50 all day. Best buy getting upgrade. …” – CTX on Countdown to the Closing Bell
“…Our companies have 300 top three finishes in the j.D. Power survey over the last number of our nearest competitor is less if you want to buy america’s best homes come to pulte/CENTEX >> do you need any money from washington at this point? I know there’s been talk about that in the industry. But do you need any? >> we do not. $3.4 billion cash is a heck of a …” – CTX on Street Signs
“…Other combinations may happen, but really none with the complementary nature of this transaction. >> erin, i’m sorry, I would just add that the first mover advantage that we have by combining with CENTEX provides that we get to pick each other as our preferred partner. In the inevitable consolidation in the industry. Given the complementary natures of our company, we’re very …” – CTX on Street Signs