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Toll Brothers (TOL)This is an EDITABLE stock research wiki. You can contribute by clicking on the EDIT PAGE link above or on the page icons that appear when you roll over one of the category subtitles below. From 1Table of contents
Company Information:Company Address: 3103 Philmont Avenue Huntingdon Valley, PA 19006-4298 Company’s Web Address: http://www.tollbrothers.com/homesearch/servlet/HomeSearch
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Company Overview:Company Products/Services/Markets:They design, build, market and arrange financing for single-family detached and attached homes in luxury residential communities. They are also involved, directly and through joint ventures, in projects where they are building, or converting existing rental apartment buildings into, high-, mid- and low-rise luxury homes. They cater to move-up, empty-nester, active-adult, age-qualified and second-home buyers in 21 states of the United States. In the five years ended October 31, 2006, they delivered 33,338 homes from 570 communities, including 8,601 homes from 350 communities in fiscal 2006. Their traditional, single-family communities are generally located on land they have either developed or acquired fully approved and, in some cases, improved. They operate primarily in the major urban and suburban areas of Pennsylvania, Connecticut, Virginia, Maryland, Rhode Island, California, Arizona, Florida, New Jersey, Delaware, New York, North Carolina, Texas, Michigan, Illinois, South Carolina, Minnesota, West Virginia and Nevada. They operate their own land development, architectural, engineering, mortgage, title, security monitoring, landscaping, lumber distribution, house component assembly, and manufacturing operations. They also develop, own and operate golf courses and country clubs associated with several of their master planned communities. At October 31, 2006, they were operating from 398 communities containing approximately 31,910 home sites that they owned or controlled through options. Of the 31,910 home sites, 25,377 were available for sale and 6,533 were under agreement of sale but not yet delivered (“backlog”). Of the 398 communities, 300 were offering homes for sale, 14 had been offering homes for sale but were temporarily closed due to the lack of availability of improved home sites or were in the process of preparing to open for sale and 84 were sold out but not all homes had been completed and delivered. At October 31, 2006, they also owned or controlled through options approximately 41,858 home sites in 300 proposed communities. They expect to be selling from approximately 340 communities by October 31, 2007. Of the approximately 73,800 total home sites that they owned or controlled through options at October 31, 2006, they owned approximately 41,800. At October 31, 2006, they were offering single-family detached homes in 207 communities at prices, excluding customized options and lot premiums, generally ranging from $280,000 to $2,128,000, with an average base sale price of $688,000. At that date, they were offering attached homes in 93 communities at prices, excluding customized options and lot premiums, generally ranging from $200,000 to $2,577,000, with an average base sale price of $498,000 and with some units offered at prices significantly higher than $2,577,000. On average, their home buyers added approximately 21%, or $121,000 per home, in customized options and lot premiums to the base price of homes delivered in fiscal 2006. [10] Competitors:Lennar Corporation, Centex, Pulte Homes, D. R. Horton, Beazer Homes, Ryland Group. Click here for comparative information. Toll also competes with many small, local builders. They are the only builder focused on the luxury market. Local builders have been getting squeezed out of the market by the large public builders who have greater access to capital and a more efficient operating structure. From 1997 to 2006 the market share of the publicly held builders has grown from 10.8% to 30.1%. [20] Not only does that demonstrate a powerful trend but it also highlights the remaining opportunity for further growth. Industry Trends and News:The housing industry is in a huge slump as a result of high defaults in sub-prime loans and because of higher interest rates upon the reset of adjustable rate mortgages. Because of the high default rates lenders have recently raised their lending standards, reducing the availability of credit for home purchases. These factors have greatly reduced the demand for new houses and has also resulted in a higher level of cancellations on existing contracts. Buy Rationale:The company has been a growth machine and is trading at a very attractive valuation. The financial trends convincingly demonstrate this company knows how to profitably grow their business. Furthermore, builders like Toll Brothers are doing to the local builders what Walmart did to the small retailers. The market will come back and when it does earnings will return to their former glory and with it the stock price. Projected Financials:Income Statement: (Paste Here) Balance Sheet: (Paste Here) Cash Flow Statement: (Paste Here) Financial Ratios: (Paste Here) Other: (Paste Here) Footnotes:[10] 2006 10-K [20] March 5, 2007 presentation to Raymond James & Associates 28th Annual Institutional Investors Conference News:
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