Gordon Reid Tri Point Homes, |Inc TPH-N BUY Apr 21, 2023

This is now one of the top 10 homebuilders in the US. Have a great management team. Very under covered. Just put out their 1^st consolidated earnings guidance for 2015. Has a large inventory of high-quality building lots concentrated in California and Colorado.

Trading at 8 times earnings with a good cash flow yield of 11%. The home builders group has strong orders and pricing. Labour and land costs hold them back, but are regional. There is a disconnect between demand and supply.

(A Top Pick Oct 18/16. Up 3%.) A relatively small homebuilder in a handful of states, primarily in the south west, and branded under a lot of different names. They also have some exposure to Texas. Thinks the whole group will move because household formation is still in a low trend. It has moved in the last 3 decades between 500,00 and 2.5 million units a year. Right now, it is just over 1 million. To keep up with population growth, 1.5 million has to be done. These builders are all very inexpensive, most trading below 10X earnings, and he thinks they have a 15%-18% growth metric in front of them. This is a good entry point.

He prefers Toll and Lennar, but TPH has a fine business plan and housing demand will continue to rise whatever the Fed does with rates.