Monday, May 21, 2012

Looking at the Hovnanian Investor Presentation ($HOV)

Hovnanian gave a presentation at the JPMorgan Homebuilding and Building Products Conference last week. There was a fascinating section called "Potential Liquidity Management Levers":

  • Enter into model sale leasebacks
  • Sell excess land
  • Issue equity for cash or debt 
  • Enter into additional joint ventures
  • Enter into land banking deals
  • Limit started unsold homes
  • Delay/reduce land purchases and takedowns
  • Reduce land development spending
I thought this was pretty interesting. I think the odds-on favorite is that they will continue to restructure by way of the stock-for-debt exchanges. It's pretty cool that they've been able to do those transactions, and it's great for the short stock, long bonds trade.

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