FOR  Forestar Group Inc

Exchange

NYSE

Sector

Finance

Industry

Real Estate

Market Cap.

590.18M

Vuru Grade

30.00/100

Current Price

$14.10
-0.05 (-0.35%)

Growth Price

$25.24
Undervalued by 78.99%

Stability Price

$3.44
Overvalued by 75.60%

Company Metrics

  • P/E 6.78
  • P/S 3.25
  • P/B 1.01
  • EPS 2.08
  • Cash ROIC -0.56%
  • Cash Ratio -
  • Dividend 0 / N/A %
  • Avg. Vol. 604,006.00
  • Shares 41.86M
  • Market Cap. 590.18M

Company Description

Forestar Group Inc. and its subsidiaries engage in the real estate and natural resources businesses in the United States. It operates in three segments: Real Estate, Mineral Resources, and Fiber Resources. The Real Estate segment secures entitlements and develops infrastructure on its lands, primarily for single-family residential and mixed-use communities, as well as own and manage projects. The ... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Starwood Capital To Buy Forestar Group In $605M Cash Deal
Law360 (subscription) - Apr 14, 2017
Law360, New York (April 14, 2017, 2:33 PM EDT) -- Starwood Capital Group will buy Forestar Group Inc. in a $605 million cash deal, the real estate development company said on Thursday, which comes at a time when the company has been taking ...
Big Georgia landowner Forestar Group being bought in $605 million deal - Atlanta Business Chronicle
BRIEF-Forestar Group to be acquired by Starwood Capital group for $605 mln
Reuters - Apr 14, 2017
BRIEF-Forestar Group to be acquired by Starwood Capital group for $605 mln. April 14 Forestar Group Inc. * Forestar group Inc. To be acquired by starwood capital group. * Total transaction equity value is approximately $605 million. * Starwood will ...
SHAREHOLDER NOTICE: Brodsky & Smith, LLC Announces an Investigation of ...
Yahoo Finance - Apr 18, 2017
BALA CYNWYD, PA / ACCESSWIRE / April 17, 2017 / Law office of Brodsky & Smith, LLC announces that it is investigating potential claims against the Board of Directors of Forestar Group, Inc. ("Forestar" or "the Company") (NYSE- FOR-News) for possible ...
Starwood Capital to Acquire Landholder Forestar Group for $605 Million - CoStar Group
The Secret to Option Trading Right Before Earnings in Forestar Group Inc
CML News - May 28, 2017
There is a wonderful secret to trading options right before earnings announcements in Forestar Group Inc (NYSE:FOR) , and really many stocks, that benefits from the rising implied volatility but avoids the risk into the actual earnings release and also ...
Hynes Keller & Hernandez, LLC Investigates Adequacy of Price and Process in ...
PR Newswire (press release) - Apr 28, 2017
NEW YORK, April 28, 2017 /PRNewswire/ -- Hynes Keller & Hernandez, LLC is investigating the proposed sale of Forestar Group, Inc. ("Forestar" or the "Company") (NYSE: FOR) to affiliates of Starwood Capital Group. Under the terms of the proposed ...
SHAREHOLDER ALERT: Levi & Korsinsky, LLP Announces an Investigation Into ...
PR Newswire (press release) - Apr 24, 2017
To: All Persons or Entities who purchased Forestar Group Inc. (NYSE: FOR) stock prior to April 13, 2017. You are hereby notified that Levi & Korsinsky, LLP has commenced an investigation into the fairness of the sale of Forestar Group to Starwood ...
Forestar Group: An Attractive Asset Play With Monetization Already Occurring
Seeking Alpha - Aug 20, 2016
Forestar Group (NYSE:FOR) is a residential and mixed-use development company. The company owns directly and through ventures 56 residential and mixed-use projects with over 7,000 acres of real estate in eleven states and fifteen different markets.
SHAREHOLDER ALERT: Brower Piven Commences An Investigation Into The Proposed ...
Yahoo Finance - Apr 20, 2017
The securities litigation law firm of Brower Piven, A Professional Corporation, has commenced an investigation into possible breaches of fiduciary duty and other violations of state law by the Board of Directors of Forestar Group Inc. (FOR) (“Forestar ...
Austin's Forestar Group sells remaining oil and gas assets
MyStatesman.com - Feb 24, 2017
Austin-based Forestar Group Inc. has reached an agreement to sell substantially all of its remaining oil and gas assets for $85.6 million, continuing its divestiture of holdings outside its main residential and mixed-use development portfolio.
Option Trading: Forestar Group Inc Powerful Long Put Spreads to Outperform ...
CML News - May 26, 2017
We find a very powerful outcome examining long put spreads for Forestar Group Inc when we use a clever earnings risk management approach.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for FOR to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate FOR's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$14.10 Current Price

$25.24 Growth Price (DCF)

Undervalued by 78.99%


Growth Rate Assumed by Market: -90.82%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$3.44 Stability Price (EPV)

Overvalued by 75.60%


Discount Rate: 15.0%

$14.71 Book Price

Fairly valued


Very Poor Cash Return on Invested Capital over the past 5 years

FOR has failed to generate positive returns on its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

FOR has lost $0.56 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow -50.17M -19.12M -11.56M -29.28M 60.16M
divided by
Invested Capital 918.43M 1.17B 1.26B 980.51M 733.21M
Cash ROIC -5.46% -1.63% -0.92% -2.99% 8.21%

Very Poor Return on Equity over the past 5 years

FOR has shown an inability to deliver results for shareholders. This could be due to poor management, FOR operating in a highly competitive industry, or having a weak business in general.

FOR has generated a $3.57 loss for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 17.88M 35.06M 17.09M -212.37M 77.04M
divided by
Stockholders' Equity 529.49M 709.85M 707.20M 501.60M 560.65M
Return on Equity 3.38% 4.94% 2.42% -42.34% 13.74%

Poor Business Performance over the past 10 years

FOR's inability to produce positive free cash flow for the majority of the past 10 years is concerning. It should be a red flag, since this company does not have a track record of delivering results for shareholders. This could be due to poor management or the nature of its business.

FOR has been losing money for the majority of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow -69.48M -57.09M 134.83M 10.85M 28.64M -50.17M -19.12M -11.56M -29.28M 60.16M

Good Balance Sheet

FOR's Total Assets double Total Liabilities. Its financial position is adequate. Remember to check Shareholders' Equity to see if it's stable or growing. It's one of the best measures of whether a company is creating value for shareholders.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash - - - - - - - - - -
Current Assets - - - - - - - - - -
Total Assets 748.73M 834.58M 784.73M 789.32M 794.86M 918.43M 1.17B 1.26B 980.51M 733.21M
Current Liabilities - - - - - - - - - -
Total Liabilities 315.53M 387.28M 272.28M 279.76M 285.33M 388.95M 462.31M 551.00M 478.91M 172.56M
Stockholder' Equity 433.20M 447.29M 512.46M 509.56M 509.53M 529.49M 709.85M 707.20M 501.60M 560.65M
Current Ratio - - - - - - - - - -
TL-to-TA 0.42 0.46 0.35 0.35 0.36 0.42 0.39 0.44 0.49 0.24

Consistent Reinvestment of Profits over the past 10 years

FOR has consistently retained profits. This may put FOR in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, FOR can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 24.80M 36.77M 95.88M 101.00M 108.16M 121.10M 150.42M 167.00M -46.05M 12.60M
Retained Earnings Growth - 48.29% 160.75% 5.35% 7.08% 11.97% 24.21% 11.02% -127.57% 127.37%

Erratic Net Profit Margins over the past 10 years

FOR has had highly erratic net profit margins which are a great cause for concern. This company may operate in a highly volatile industry, or it may just have poor performance. Look at reasons for this inconsistency to understand if there is any reason to look past it.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 24.80M 11.97M 59.11M 5.13M 7.15M 17.88M 35.06M 17.09M -212.37M 77.04M
divided by
Revenue 177.99M 159.72M 146.25M 101.36M 135.57M 172.59M 331.05M 306.77M 262.42M 197.31M
Net Profit Margin 13.93% 7.50% 40.41% 5.06% 5.28% 10.36% 10.59% 5.57% -80.93% 39.05%

Weak Pricing Power over the past 10 years

FOR is likely in a highly competitive industry, due to low barriers to entry. It's because of this, that FOR has been unable to raise prices and increase their profitability. This puts them in a poor position if inflation becomes an issue, as they would struggle to pass higher costs onto consumers.

Only $- of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit - - - - - - - - - -
divided by
Revenue 177.99M 159.72M 146.25M 101.36M 135.57M 172.59M 331.05M 306.77M 262.42M 197.31M
Gross Margin - - - - - - - - - -

High Capital Intensity over the past 10 years

FOR spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

150.66% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 3.20M 5.20M 7.30M 2.70M 6.35M 24.15M 107.90M 118.64M 64.41M 6.72M
divided by
Net Income 24.80M 11.97M 59.11M 5.13M 7.15M 17.88M 35.06M 17.09M -212.37M 77.04M
Capital Expenditure Ratio 12.90% 43.40% 12.34% 52.72% 88.73% 135.10% 307.74% 694.31% -30.33% 8.72%

Inconsistent Dividend History over the past 10 years

FOR has started distributing dividends in the past couple years or has recently suspended their dividend distribution. The reliability of future distributions is unclear.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 27.70M - - - - - 7.15M 3.15M 701,000.00 -
divided by
Shares Outstanding 35.38M 35.89M 36.10M 36.38M 35.78M 35.48M 36.81M 43.60M 34.27M 42.33M
Dividend Paid Per Share 0.78 - - - - - 0.19 0.07 0.02 -
Price at Year End 22.60 8.38 22.17 19.32 15.13 16.97 21.36 15.60 11.24 13.30
Dividend Yield 3.46% - - - - - 0.91% 0.46% 0.18% -

History of Stock Buybacks over the past 10 years

FOR has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 35.38M 35.89M 36.10M 36.38M 35.78M 35.48M 36.81M 43.60M 34.27M 42.33M
Stock Bought Back - -1.43% -0.58% -0.76% 1.67% 0.84% -3.62% -15.56% 27.23% -19.06%
Share your thoughts about FOR

Sign Up or Log In to start contributing!


Discussion

Nothing here yet. Be the first to post!