The real estate development sector of US stocks may not be what you think
The 80th installment of Easy Investors
US Stock Nikken 27: Inventory of real estate development stocks in US stocks
[Analysis results at the end of the article 👇]
Today is April 21, 2022. Before the Thursday market, let's take stock of the real estate development sector. There are a total of 10 stocks, with market capitalization ranging from 262.8 billion to 850 million. There are only 5 stocks with a market capitalization of 300 million or more, which is really shocking.
There are fewer than 10 stocks, so there's no need to break them down; look through them one by one.
1. $Landsea Homes(LSEA.US$It is a stock listed in January 2021, with a gross profit margin of 18% and a net profit margin of 5%, which is not very attractive.
Revenue in 2020 was 0, management expenses were 2.77 million, total expenses were 2.67 million, and interest income was 690,000. With no revenue, the cost of maintaining the company is extremely low. In 2019, revenue was 630 million, and management costs were 35 million, accounting for 5.6%, which is fine. Revenue in 2021 was $1,023 million, with management costs of 70 million, accounting for 7%, which is unreasonable. As usual, the larger the scale, the smaller the management share.
The balance ratio is 51%, and the 2021 inventory is 845 million. Currently, there are only 3 years of data, and the revenue for 1 year is still 0, which is not enough to make a confident judgment.
2. $Forestar Group(FOR.US$The net profit curve rose amid fluctuations, and the 5-year average growth rate was13%. The earnings per share growth rate is slightly lower, and the operating profit curve varies greatly. Looking at the profit table, you can see that the company's “fixed asset sales income” has changed a lot in recent years, from nearly 30 million to close to 2.5 million. The extent of income tax changes is also enough to distort the profit curve. In terms of operating profit, it has maintained an annual growth rate of more than 100% for the past 4 years, and increased by 80% in Q3 2021.
Revenue declined sharply in the previous two years and increased sharply in the past three years, but net operating income has always had a large net outflow, and free cash flow has also always been a net outflow. Liquidity has declined sharply, from a high of 16.5 to the current 0.86. Currently, the company has 160 million dollars in accounts, and net operating volume in 2021 is 300 million. If the company cannot last a year without financing, the risk is still not small.
3. $Five Point Holdings(FPH.US$After 4 years of continuous loss in operating profit, it was finally basically flat in 2021. Currently, the market is valued at 0.66 percent off the net market ratio. Current assets are $2,443 million, of which inventory is 2.1 billion, and annual revenue has just reached 224 million. The inventory turnover time is too long and unattractive
4. $American Realty Investors(ARL.US$Revenue has generally declined over the past 5 years, and operating profit has also slipped into the 3-year loss range. Currently, the price-earnings ratio of 93 times and the net market ratio of 1.33 times are unattractive.
5. $Belpointe PREP(OZ.US$It just went public in 2021, with a slight loss of more than 3 million, but the revenue was only 1 million, and the business has not started at all. Currently, it has 200 million cash, more than 100 million fixed assets, and a net market ratio of 1.05 million, and there is no investment value for the time being.
Based on today's research, the real estate development sector currently has no investment value, and the investment index is 0
An understandable way to invest in value.
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