Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, homebuilder Standard Pacific
With that in mind, let's take a closer look at Standard Pacific's business and see what CAPS investors are saying about the stock right now.
Standard Pacific facts
|Headquarters (Founded)||Irvine, Calif. (1986)|
|Market Cap||$421.4 million|
|Trailing-12-Month Revenue||$1.2 billion|
CEO Kenneth Campbell, III
CFO John Stephens
|Return on Capital (Average, Past 3 Years)||0.8%|
|Compound Annual Revenue Growth (Over Past 3 Years)||(28.4%)|
|Cash/Debt||$696.6 million / $1.3 billion|
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 58% of the 241 All-Star members who have rated Standard Pacific believe the stock will underperform the S&P 500 going forward. These bears include All-Stars DarthMaul09 and Beorn10, both of whom are ranked in the top 3% of our community.
Just three days ago, DarthMaul09 included Standard Pacific as part of the seemingly unsustainable housing rally:
Although the housing stocks look like they have begun to rebound, I believe that this is another illusion with further pain still to come. Only when the government admits that they are powerless to fix the problems and the housing markets hits a real bottom, will a recovery be possible. Until then, we live the dream.
Over the past three months, Standard Pacific is up 19%, while the housing sector as a whole has gained about half that amount. Although Standard Pacific's debt-to-equity of 300% -- higher than that of rivals Pulte (133%), Lennar (149%), D.R. Horton (90%), and even Beazer (267%) -- has given its shares some serious bang in the recent rally, our community hasn't forgotten that leverage works in both directions. According to the economic picture that CAPS All-Star Beorn10 paints, Standard Pacific seems particularly vulnerable:
Home builders and the regional banks are both hoping for a housing recovery to support the value of their assets and to help grow profits, but although the market is rising there does not appear to be a similar recovery in the financial health of most of the home buyers. If regional banks go back into survival mode, then even if home builders are able to make a profit by selling new homes at below existing home prices the lack of available credit may freeze home sales and take down some of the weaker home builders.
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