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    Business Some firms to insist customers and staff still wear face masks

    July 08, 2021

    Business Some firms to insist customers and staff still wear face masks

    Some firms to insist customers and staff still wear face masks

    Posted: 07 Jul 2021 04:27 AM PDT

    How is a design user story different from a development user story?

    Posted: 08 Jul 2021 01:20 AM PDT

    I just started a new senior role (my first step into senior status) where the entire team uses Jira and Confluence as project management tools. However, I did notice that the project workspace in Jira is shared by both design + dev teams.

    So my questions are, as follows:

    • Should the design workspace be separate and distinct from dev?
    • should design stories be written differently from dev stories (more user-centric rather than code issue(s))?
    • And if there's a separate design workspace, what do y'all recommend in terms of approach, workflow, and communication in moving a design user story to dev (assuming all iterations, test, and evaluation points to production)?

    Could really use the collective wisdom!! Thanks in advance.

    Edit: This article has all the information I need. Thank you u/UpvoteBeast!

    submitted by /u/costataheartsp0
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    Opinion | Shut Down the Tax Havens

    Posted: 07 Jul 2021 02:31 AM PDT

    Jeff Bezos hits wealth record of $211 billion on Pentagon move

    Posted: 07 Jul 2021 04:45 AM PDT

    Immigrants with $20k any ideas?

    Posted: 07 Jul 2021 10:36 PM PDT

    What do you suggest an immigrant who knows some English but doesn't know the rules and the laws should do with $20k? Preferably how to grow it/ invest it? Any business/side hustle ideas? Or it's too low of amount to do anything with?

    submitted by /u/vnamir
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    Best value-investing website?

    Posted: 08 Jul 2021 12:44 AM PDT

    Hey everyone, for anyone interested in investing long term ChineseAlpha, does very advanced financial analysis for Chinese stocks to determine whether to buy or short stocks. The analysis is very impressive that uses DCFs benching and is led by top professionals from backgrounds like consulting and IB that follow rigorous value investing principles. It also very useful for anyone simply interested in seeing how stocks are valued with in-depth insight. Would recommend checking it out, for anyone looking to make long-term sound investing instead of just following the crowd and busting out.

    submitted by /u/YT_AMINCR7GAMER
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    Advice on creating Ecommerce website for new Firearms Business

    Posted: 07 Jul 2021 09:04 PM PDT

    So I started my firearms business almost two years ago, but due to lack of supply (no guns or ammo), I didn't bother with creating a website and developing the business. Now that supply is somewhat improving (just a little bit), I need a simple ecommerce website. I can't use shopify or squarespace or etc since they prohibit firearms sales. I have no webdev nor design experience. What do you all recommend?

    submitted by /u/Paliknight
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    Quoting my job at 54, is there a legal difference between resigning and retiring?

    Posted: 07 Jul 2021 09:04 PM PDT

    House prices dip as stamp duty holiday ends

    Posted: 07 Jul 2021 02:58 AM PDT

    Ex-JPMorgan Trader Wins U.K. Employment Fight Over Spoofing

    Posted: 07 Jul 2021 11:33 AM PDT

    Elliptic a leading provider of crypto-asset risk management Partner with Silvergate Bank to automate KYC for crypto businesses

    Posted: 08 Jul 2021 12:46 AM PDT

    Seth Godin's Marketing Secrets [podcast interview]

    Posted: 07 Jul 2021 03:36 PM PDT

    $PHM PulteGroup: company, risk and financial analysis for a major residential homebuilder

    Posted: 07 Jul 2021 08:06 PM PDT

    Company Summary

    PulteGroup is a residential home builder based in Atlanta and formed in 1956. They are the fourth largest homebuilder in the US after $DHI, $LEN, and $NVR. They have a number of different brands and are vertically integrated in the homebuilding process from purchasing undeveloped land to selling completed homes. They develop communities with single family detached homes, townhouses, duplexes and condos. Their target market is middle class Americans and they also develop residential communities focused on senior living in 23 different states. 45% of their customers are 'moving up', 31% are first time home buyers and 24% are purchasing senior living options.

    When purchasing land, they claim they use well developed data models to predict socioeconomic trends for housing markets in cities and isolated communities. The auditor seemed very optimistic about their computer models as compared to $MDC, a similar homebuilder.

    They sell homes in two ways:

    • Speculative homes: homes that have already been built. PHM expects that these homes will be purchased based on their own analysis of the region
    • Pre-ordered homes: homes that are customized by a committed buyer. The buyer puts down some principal capital that is usually non-refundable and has to prove that they are adequately covered to purchase or finance the home.

    They run a mortgage issuance segment that mostly issues mortgages to their homebuyers and then sells the mortgage to some other institution in order to reduce the risk on their own balance sheet.

    They control 180,352 lots in total. 5000 in the NW, 15000 in the SE, 21000 in Florida, 9700 in the midwest, 16000 in texas, and 25000 in the west. 30% of lots are developed. 91, 363 of these lots are owned, and 88,989 are optioned. 43% of owned lots are developed and 16% of optioned lots are developed. See Note 2. At the bottom of the report for more info on the regions.

    Management overview:

    I've heard the grandson of the founder speak, and all I can say is it was a good decision keeping him out of the CEO position. People have a good opinion of the company from what is on glassdoor. There are a few comments about management being bureaucratic and putting unnecessary pressure on employees, but these only account for a small percentage of comments.

    CEO: Ryan Marshall. He has an accounting and business degree, but it looks like he has only ever worked for PHM. He has over 20 years at PHM and his compensation was over 13 million dollars. This seems way too high for a CEO of a company this size. He has very good reviews on glassdoor (94% approval).

    CFO: Bob O'Shaughnessy. Has an accounting degree. He has a much more diverse work experience than the CEO, but it isn't in housing. He spent 10 years at Ernst and Young, 14 years at Penske as the CFO, and then 10 years at PGH as CFO. He has past CFO experience so I wouldn't be worried about him making irrational decisions.

    Addressable Market

    This section is speculative, they do not provide a breakdown of their target markets so I had to do some reverse engineering to get to this conclusion.

    Their main business is single family homes, which account for 85% of their revenue. They talk vaguely about who they target, but it is quite clear to me after looking at the homes they sell that their target market is the middle class with a bit more in savings than most. Their homes are good quality, and their senior living arrangements are standalone homes with a lot of customization and community amenities available. From my analysis I think it is fair to state that their average buyer is in the upper middle class, and the retirees who buy homes have an average amount of savings, although there is serious interest from wealthier seniors.

    Risk

    PHM is directly exposed to the volatility of the housing industry. They are a middleman in real estate ownership and try to keep their inventory turnover below 36 months. The way they purchase land is akin to dollar cost averaging. They purchase land more frequently than 36 months, and their long term assets are constantly changing. This brings us to the possibility of significant reduction in real estate value. Sure they might lose paper value on their balance sheet but there is still a fixed selling price that they will generate significant operating cash flows from.

    Thankfully, there is a very prominent event that is an example of the worst case scenario for homebuilders - check this out if you don't know what I am talking about. They took a big hit because of the dropoff of demand. It took 6 years, or four housing cycles to build back to pre 2008 levels, and they had three years of negative earnings. They managed to decrease debt and took the unfavorable but appropriate approach of selling 150 million shares, an increase of 60 percent. Since then they have bought back those 150 million shares but who's to say there isn't another housing crisis on the horizon? I have looked closely at common and uncommon indicators and all I see is a lack of supply but there is obviously much more that I am completely blind to.

    The mortgages they keep on their balance sheet are slightly worrisome, but when I think about it, if the homeowner defaults, the home will just be repossessed by PHM. So not much of a concern.

    They are vulnerable to commodity price inflation, but the distribution and acquisition of these works the same way as their land purchases do. Non land inventory is purchased regardless of the price, and home prices tend to slightly outperform the general CPI so this doesn't really concern me as it balances out the same way as land purchases.

    One unconventional risk they face is the lack of skilled laborers. The average age of construction workers has increased by two years in the past seven years. There are more and more people going to post secondary school trying to make more money and do less work each year. This really does pose a significant risk to PHM in the long run. Less human capital supply means higher wages means lower margins means less operational cash generation means more debts and less cash means ultimately a more unstable and unhealthy business. No matter what happens otherwise in the economy, I think this could be their biggest long term risk.

    Their in your face optimism in their annual report isn't captivating me. They also say that they think past stock price performance compared to the DOW home constructors index "represents a meaningful analysis for investors" (Page 19 above the stock performance chart). Again, this is really immature for the auditor to say this. They have competitive financials and a good company, so there is no reason for the auditor to go so overboard when they prepare reports. This stuff always makes me suspicious.

    Revenue Breakdown / Company segments

    96% or revenue is from all homebuilding operations. This figure is 10.7 Billion:

    • 45% of their customers are not making their first purchase. This section excludes seniors.
    • 31% are first time home buyers.
    • 24% are purchasing senior living options.

    The remainder is from their financial services. This figure is 0.362 Billion.

    Their average annual output of homes was 24600 last year. It has been growing slowly in the past three years at about 2% YoY.

    Industry position

    Some of their competitors are $DHI, $LEN, $NVR, $TOL, $LGIH, and $KBH to list a few. PHM has the lowest P/E and PEG, and their P/S AND P/B are average out of their competitors. Their D/E and margins are competitive, but they are lagging with their ROE/ROA/ROI. Free cash flow is currently at about 30% of the market cap but this is not usually the case.

    They have an estimated 6.1% market share in American residential construction.

    Base stats

    Market Cap: 14.33 B

    Total Debt: 3.2 B

    Cash & Liquid assets: 1.6 B

    Goodwill: 163 M

    Total Assets: 12.2 B

    Equity: 6.6 B

    Revenue: 11.5 B

    Earnings: 1.5 B

    Operating Cash Flow: 1.7 B

    Financing cash flow: -1.9B

    Enterprise Value: 15 B

    Shares Outstanding: 263 M

    EV/Sales: 1.05x

    ROE: 24.7%

    Overview/Growth and Developments

    Growth: Revenue took a turn for the worse in the late 2000s, but since then it has almost returned to pre 2008 levels. The growth has been very steady

    Margins:

    • Margins seem to hover between 8-13%, and there hasn't been much change over the years. The values are the same before 2007

    Net reinvestment:

    • They have a BBB- Credit rating
    • A lot of capital expenditures go towards land that is either held and sold or developed
    • Not much R&D that would benefit them.

    Share buybacks:

    • Share buybacks have been good since 2008. They have shown that they are capable of taking action to add shareholder value
    • Their massive issuance in 2008 also shows that they are willing to raise capital and diminish shareholder value if it is needed for the business.
    • The implications are mixed here. If I am looking from a shareholders perspective, then I would be skeptical of their excessive issuance in the past, but if I was looking at it as a long term business owner, it shows responsibility and willingness to sacrifice their reputation if it can keep their business strong.
    • They have bought back almost all of the shares they issued in 2008.

    Costs:

    • They are consistently putting more money into paying off debts than they are taking out debt.
    • One thing to consider in their operational costs is they are forced to pay market prices for commodities. They don't keep a lot of inventory so these costs may become harder to manage unless they raise home prices along with the CPI. They have a 24-36 month lag behind the CPI in pricing their marketable assets because of the nature of the building contracts with their buyers.
    • They had their second most successful year in 2020, and instead of massive bonuses they decided to:
      • Repay all 700M drawn on their revolving credit facility
      • Repurchase $75M in shares
      • Increase dividends by 17% (Why so much? Invest back into the business or buy more shares)
      • Committed to an early completion of notes due 2026-7 (Done Mar '21)

    Debts:

    • They have 411M in financial services debt and 2.752B in Notes payable.
    • The notes payable is adequately spread over 15 years. The highest interest is 7.9% due 2032 and the average interest rate is 5.5%. As long as their operations are at least half as strong, their debt won't be a problem. Interest expenses and retirement on these on average will cost them 180M/year
    • Financial services debt is of no concern with an average interest rate of 3%.

    Assets:

    • Assets have grown since 2011.
    • They have just under 13 B in assets
    • They currently have less assets then they did in 2005-06
    • Most of their assets are in PPE but they still keep 3.2 B in current assets.

    WACC: 8.5%

    Long term growth rate: They will grow with the housing market, but also shrink with it. 3.5-3.8% organic growth per year is reasonable.

    Legal: Nothing

    Recent/expected developments:

    • They have 13657 homes in production currently, with 10421 of those already sold.
    • No expected developments

    Industry advantages

    Suppose this data driven model they talk about really can predict socioeconomic trends in neighborhoods or to-be neighborhoods. This would offer huge profitability advantages for them, but unfortunately so far their margins and growth are pretty in par with the industry.

    They do have an advantage as a publicly traded company of their size. Lots of access to capital and large capital reserves make it easy for them to have many operations simultaneously in different parts of the country.

    They have a healthier history internally compared to competitors. Their finances have stayed intact even in the worst case scenario and they have shown a better than average ability to rebound after hardship. This is because of the financial maturity and responsibility management has taken over the years and hopefully this is a culture that continues in the business.

    Sell side VS Buy side

    I am more bullish on this one, but here are two arguments for two different opinions. I will limit them to five points each:

    Sell:

    • They did not hesitate to reduce shareholder value in 2008 instead of alternate debt financing. This shows that they are willing to do it again.
    • Prevailing sentiment is split - there is a possibility of a massive real estate crash in the near future
    • Economic conditions are favorable right not, but it is expected that they will not be as favorable in the future
    • Some of their corporate paper is sold at quite a high yield, which may be grounds for default if they do not sell shares or more debt in the event of financial difficulties.
    • The demand for skilled workers is and will be rising, making it more difficult for PHM to acquire valuable human capital without raising wages.

    Buy:

    • They have steady organic growth
    • Management has shown more than once that they are responsible. In bad times they are capable of sacrificing shareholder value for more shareholder value in the future. In good times they make good on future obligations early and don't get too euphoric with expansions and bonuses.
    • Their asset and debt structures are very attractive - with adequate coverage of debts and not a lot of outstanding obligations
    • They have great ability to generate lots of capital in good times and store that capital away.
    • The economic conditions indicate a shortage of residential housing, so even if there is an economic catastrophe in the near future, PHM and other homebuilders will still be needed to fill a 5.5 million house void in the country. This figure is only going to grow too without federal intervention which either way is advantageous for PHM.

    Valuation

    Assuming a dividend growth of 1 %, a 3.8% expected growth from the company and an 8% rate of return, the Gordon model gives them a $10.7 valuation per share. Their intrinsic value calculated from the DCF model is between $70-100, giving an average margin of 35%. Of course the DCF model makes the assumption that OCF and investments will be stable and follow my predicted growth rates, so this is a subjective valuation no matter how accurate I think it may be.

    Valuation Market Comparison

    The average intrinsic values I have found for the industry show that the industry is overvalued by about 15%, giving PHM a potential relative valuation of 50% undervalued.

    Opinion

    I would give $PHM a buy rating. They have a strong, cash generating business model. There is more risk associated with owning them than a comparable consumer staples business, but there is also much more potential reward and in my opinion the reward is more likely to be realized than the risk. This is something I would be comfortable holding in my portfolio.

    Notes and sources

    Notes:

    Note 1. I am not a financial advisor nor am I a current shareholder of $PHM as of the time this was posted. This is my opinion and not a recommendation for you to purchase any securities without doing your own research

    Note 2: Regions:

    Northeast:

    Connecticut, Maryland, Massachusetts, New Jersey, Pennsylvania, Virginia

    Southeast:

    Georgia, North Carolina, South Carolina, Tennessee

    Florida:

    Florida

    Midwest:

    Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio

    Texas:

    Texas

    West:

    Arizona, California, Nevada, New Mexico, Washington

    Sources:

    Their 10-K on the SEC website, Macrotrends, Glassdoor, Yahoo finance, Finviz, Wikipedia, $PHMs website and their subsidy websites.

    submitted by /u/valuescott
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    Overnight Energy: 'Eye of fire,' Exxon lobbyist's comments fuel renewed attacks on oil industry | Celebrities push Biden to oppose controversial Minnesota pipeline | More than 75 companies ask Congress to pass clean electricity standard

    Posted: 07 Jul 2021 03:42 PM PDT

    Animoca Brands raises $50 million from investors such as Scopely and Samsung

    Posted: 07 Jul 2021 01:20 PM PDT

    Berkshire

    Posted: 07 Jul 2021 06:05 PM PDT

    What do you guys think is the future of Berkshire Hathaway?

    Warren Buffet often considered the best investor possibly of all times.

    But he appears to be retiring or stepping back a bit. He's 90 years old.

    So do you think there is another younger investor capable of replacing him at the helm of Berkshire?

    If we are excluding Charle Munger and Buffet, who would you say at the best investors of today with a proven track record of success but still probably 10-20 years left of their investing prime?
    Personally kind of feeling like Buffet is one of a kind. That guy that could sit around and read 10k's all day with a McDonald's breakfast. So yeah just wanted to hear some thoughts. Thought about buying some Berkshire myself but I wanted Buffet's Berkshire if that makes sense.

    submitted by /u/PaleontologistWest
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    People's Bank of China Survey Report: Residents prefer financial products of banks, securities and insurance companies

    Posted: 07 Jul 2021 09:40 PM PDT

    According to the survey report on urban depositors in the second quarter of 2021 released by the People's Bank of China(PBOC) on July 5, the top three investment methods preferred by residents are: "banks, securities, and insurance companies' financial products", "trust funds" and "stocks". The proportions of residents who choose these three investment methods are 48.5%, 26.3% and 16.5% respectively.

    In the second quarter of 2021, PBOC conducted a questionnaire survey of 20,000 urban depositors in 50 cities across the country. In terms of consumption, saving and investment willingness, the results show that 25.1% of residents tend to "consume more", an increase of 2.8% from the previous quarter; residents who tend to "save more" account for 49.4%, an increase of 0.3% from the previous quarter; residents who tend to "invest more" account for 25.5%, a decrease of 3.1% from the previous quarter.

    When being asked about expenditure plans for the next three months, residents' choices from high to low are: education(28.7%), healthcare(26.8%), travel(25.0%), house purchase(19.7%), large amount commodities(19.4%), social culture and entertainment(17.7%), and insurance(13.1%).

    Source: China Securities Journal

    translated by InsurView

    submitted by /u/InsurViewChina
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    Overseas Payment Tracking Payment from Bank to my Bank - possible?

    Posted: 07 Jul 2021 09:36 PM PDT

    Looking for advice:

    A company have paid into my business bank account overseas on the 18th of June - it should now have been cleared - it is the 8th of July.

    I have not received it and my bank have not received it.

    I have asked the company - and they say it was sent on the 18th - I am asking for them to check the status of the payment - but I am looking for further advice here.

    Is it possible for me to check the status of the payment somehow?

    Thanks in advance.

    submitted by /u/bonzowildhands
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    Is this a good major to be in?

    Posted: 07 Jul 2021 08:15 PM PDT

    Hi so right now it looks I'm gonna be double majoring in Finance and risk management and digital marketing. Which comes out to be a degree in business administration I think. Is this a good double major, should I stay in this major. Does anyone know if this is a good combination to find a good job?

    submitted by /u/Nice_Faithlessness_5
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    Blackstone's Stake in CGC Another Sign of the Financialization of Collectibles

    Posted: 07 Jul 2021 11:41 AM PDT

    How hard is it to obtain a liquor license in Virginia?

    Posted: 07 Jul 2021 04:40 PM PDT

    I am in the early stages of opening a business in a college town. It's gonna be a hangout and chill type place, so serving alcohol is probably a requirement if I don't want to go out of business in a year.

    Where do I begin, what are the costs, etc?

    submitted by /u/MisterCru
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    Item 9 Labs' Cannabis Franchise Opens First Dispensary, with More than Two Dozen Additional Shops in Development; Launches Corporate Acquisition Strategy to Make Cannabis Ownership Turnkey for Franchise Partners

    Posted: 07 Jul 2021 07:12 AM PDT
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