What Is Book Value for a Homebuilder?
Homebuilder investors try looking at a company’s book value to determine at which price a given stock should be trading at, regardless of what it is trading at. On Hovnanian’s recent FQ4 2007 conference call, an analyst tries to get clarity on just what a book value means in the industry these days. The conference call also gives Hovnanian’s perspective on the industry-wide debate over the best way to get through a downturn: Stop building, sell off land and cut down supply, or keep building and wait for things to blow over? Ara K. Hovnanian, President and CEO, Hovnanian Enterprises Inc. Our current plan is not to shrink our footprint, but shrink the size of the foot that’s in that footprint, if you will. We just plan to pare down our inventories in virtually all of our markets. Carl Reichardt – Wachovia Securities Okay. Later on in the call: Wayne Cooperman – Cobalt Capital You wrote off a lot of stuff this quarter and you still have a $19 book value. I was wondering if you could actua
