KB Homes Sees 48% Cancellation Rate

I have a call in to Kelly Masuda at KBH (Investor Relations).

The absolute cancellation rate is not in the 8k. I will confirm that number with him when he calls me back.

If I am right, tradingmadman and grandeur owe me a beer, each.
 
Quote from ByLoSellHi:

Exactly.

If they reported that that the Q3 cancellation rate was 53%, and the Q4 cancellation rate was 48%, how could it be that the rate of cancellation increased 48% in Q4?

If tradingmadman and grandeur are right, the cancellation rate would have been reported to have decreased by 5%. But it didn't.

I just looked at the 8k, and the absolute number of cancellations are not in there.
More...


the cancellaton rate does not reflect the amt.of homes sold.
You can hae a higher cancellation rate in one quarter and still have more homes sold...... and greater profits than a previous
quarter with a lower cancellation rate
john:D
 
Quote from appleseed:

the cancellaton rate does not reflect the amt.of homes sold.
You can hae a higher cancellation rate in one quarter and still have more homes sold...... and greater profits than a previous
quarter with a lower cancellation rate
john:D
More...

I know that.

If KBH signed 10,000 contracts to sell homes in Q4, and they had a cancellation rate of 48%, that means they will only close on 5,200 of those homes.

Plus, this 5,200 homes could be an increase of closings compared to prior quarters, even with a high cancellation rate.

But my point remains. I believe that tradingman and grandeur are wrong. They claim that the 48% reported is an increase in the cancellation rate (compared to what?).

I am saying it an absolute % of the people who signed purchase agreements in Q4 who backed out of those agreements.
 
Quote from ByLoSellHi:

I know that.

If KBH signed 10,000 contracts to sell homes in Q4, and they had a cancellation rate of 48%, that means they will only close on 5,200 of those homes.

Plus, this 5,200 homes could be an increase of closings compared to prior quarters, even with a high cancellation rate.

But my point remains. I believe that tradingman and grandeur are wrong. They claim that the 48% reported is an increase in the cancellation rate (compared to what?).

I am saying it an absolute % of the people who signed purchase agreements in Q4 who backed out of those agreements.
More...
 
Quote from ByLoSellHi:

I know that.

If KBH signed 10,000 contracts to sell homes in Q4,
More...

Edit:
NO. NO. NO!! that 10,000 would be net orders. if last Q net orders were 12,000. of the 2,000 difference 150 may have been due to cancellation. versus up from 100 example.
 
Quote from TradinMadMan:

Edit:
NO. NO. NO!! that 10,000 would be net orders. if last Q net orders were 12,000. of the 2,000 difference 150 may have been due to cancellation. versus up from 100 example.
More...

Alright TMM. You might be right. I am going to get the absolute number of cancellations from IR at KBH, though, because I want to be clear.

I've made it a point to never give up on an equation until I am clear. Sometimes, it takes longer than I'd wish, but I'd rather know and prevent my own misunderstandings in the future, as it helps me avoid investment mistakes.

I'd rather be embarrassed, but learn from my misunderstandings, than lose money.
 
Quote from TradinMadMan:

embarassed, naa. we dont have a face. btw, I was once wrong, but I was wrong about being wrong so I was actually right.:D :D :D
More...

:D

Cheers bro. :cool:

I'll let you know what the absolute number of cancellations are if investor relations provide them to me.
 
You must log in or register to reply here.
Back
Top