FOR  Forestar Group Inc

Exchange

NYSE

Sector

Finance

Industry

Real Estate

Market Cap.

444.98M

Vuru Grade

10.00/100

Current Price

$13.05
-0.15 (-1.14%)

Growth Price

$9.18
Overvalued by 29.62%

Company Metrics

  • P/E 75
  • P/S 1.6
  • P/B 0.87
  • EPS 0.17
  • Cash ROIC -1.48%
  • Cash Ratio -
  • Dividend 0 / 0%
  • Avg. Vol. 349,454.00
  • Shares 34.10M
  • Market Cap. 444.98M

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

Form 4 Forestar Group Inc. For: Feb 14 Filed by: Squires Richard D.
StreetInsider.com - Feb 11, 2016
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b). 1. Name and Address of Reporting Person *. Squires Richard D. (Last), (First), (Middle). 6300 BEE CAVE ROAD. BUILDING TWO, SUITE 500 ...
Activist Investors Are Putting the Heat on Forestar Group
TheStreet.com - Jan 7, 2015
The activist investors putting the heat on real estate and natural resources company Forestar Group Inc. (FOR) said Tuesday they believe they are at an impasse with the company over possible changes and are considering all options to them as ...
Shareholders Call for Board Changes at Forestar Group - Wall Street Journal
Activist shareholders seek big changes at Forestar Group - Austin Business Journal
Forestar Group Inc Realized Volatility Hits A Plunging Low
CML News - Feb 21, 2017
This is a proprietary realized volatility rating created by Capital Market Laboratories (CMLviz) based on a large number of data interactions for Forestar Group Inc (NYSE:FOR) . We examine the little used gem of daily stock volatility over a 20-day and ...
Analysts Anticipate Forestar Group Inc (FOR) to Post $1.07 EPS
BNB Daily (blog) - Feb 21, 2017
Forestar Group logo Shares of Forestar Group Inc (NYSE:FOR) have received an average broker rating score of 1.00 (Strong Buy) from the two analysts that cover the stock, Zacks Investment Research reports.
The Forestar Group Inc (FOR) Shares Sold by First Interstate Bank - DailyQuint
Forestar Group to Release Fourth Quarter 2016 Results on March 1, 2017
Yahoo Finance - Feb 1, 2017
Forestar Group Inc. (FOR) will release its results for fourth quarter 2016 on March 1, after the market closes. The company will host a conference call on Thursday, March 2, 2017 at 10:00 a.m.
Zacks: Forestar Group Inc (FOR) Given Consensus Rating of “Strong Buy” by Analysts - Community Financial News
Broker Outlook For The Week Ahead Forestar Group Inc (NYSE:FOR) - Fiscal Standard
Carlson Capital Cuts Exposure To Forestar Group Inc. (NYSE:FOR)
Library For Smart Investors - Dec 8, 2016
Carlson Capital has disclosed owning 1.68 million shares in Forestar Group Inc. (NYSE:FOR), representing 4.99% equity ownership in the company.
Successful Earnings Option Trading: Forestar Group Inc (NYSE:FOR)
CML News - Feb 14, 2017
As we look at Forestar Group Inc we note that a long put is one of the most common implementations of an option strategy, but the analysis completed when employing the long put often times lacks the necessary rigor especially surrounding earnings.
Forestar Group Inc. Reports Second Quarter 2016 Results
Business Wire (press release) - Jul 29, 2016
AUSTIN, Texas--(BUSINESS WIRE)--Forestar Group Inc. (NYSE: FOR) (“Forestar” or the “Company”) today reported second quarter 2016 net income of approximately $9.6 million, or $0.23 per share outstanding, compared with second quarter 2015 net loss of ...
Forestar Group Inc. Reports Third Quarter 2016 Results
Business Wire (press release) - Nov 9, 2016
AUSTIN, Texas--(BUSINESS WIRE)--Forestar Group Inc. (NYSE: FOR) (“Forestar” or the “Company”) today reported third quarter 2016 net income of approximately $9.7 million, or $0.23 per share outstanding, compared with third quarter 2015 net loss of ...
The Brokerages Anticipate Forestar Group Inc (FOR) to Announce $1.07 EPS
DailyQuint - Feb 20, 2017
Shares of Forestar Group Inc (NYSE:FOR) have earned an average broker rating score of 1.00 (Strong Buy) from the two brokers that provide coverage for the stock, Zacks Investment Research reports.
Forestar Group Inc (FOR) Receives Average Rating of “Strong Buy” from Brokerages - Chaffey Breeze
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.

$13.05 Current Price

$9.18 Growth Price (DCF)

Overvalued by 29.62%


Growth Rate Assumed by Market: 500.00%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


FOR's most recent year of (normalized) free cash flow is negative. This is the base number for forward projections. This means that if you increase the growth rate, the amount of negative FCF grows, thereby decreasing the price.

Show Free Cash Flow numbers

$16.18 Book Price

Undervalued by 23.98%


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 $1.48 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20112012201320142015
Free Cash Flow 28.64M -50.17M -19.12M -11.56M -29.28M
divided by
Invested Capital 794.86M 918.43M 1.17B 1.26B 980.51M
Cash ROIC 3.60% -5.46% -1.63% -0.92% -2.99%

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 $6.04 loss for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20112012201320142015
Net Income 7.15M 17.88M 35.06M 17.09M -212.37M
divided by
Stockholders' Equity 509.53M 529.49M 709.85M 707.20M 501.60M
Return on Equity 1.40% 3.38% 4.94% 2.42% -42.34%

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
2006200720082009201020112012201320142015
Free Cash Flow -29.07M -69.48M -57.09M 134.83M 10.85M 28.64M -50.17M -19.12M -11.56M -29.28M

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
2006200720082009201020112012201320142015
Cash - - - - - - - - - -
Current Assets - - - - - - - - - -
Total Assets 620.17M 748.73M 834.58M 784.73M 789.32M 794.86M 918.43M 1.17B 1.26B 980.51M
Current Liabilities - - - - - - - - - -
Total Liabilities 194.38M 315.53M 387.28M 272.28M 279.76M 285.33M 388.95M 462.31M 551.00M 478.91M
Stockholder' Equity 425.80M 433.20M 447.29M 512.46M 509.56M 509.53M 529.49M 709.85M 707.20M 501.60M
Current Ratio - - - - - - - - - -
TL-to-TA 0.31 0.42 0.46 0.35 0.35 0.36 0.42 0.39 0.44 0.49

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
2006200720082009201020112012201320142015
Retained Earnings - 24.80M 36.77M 95.88M 101.00M 108.16M 121.10M 150.42M 167.00M -46.05M
Retained Earnings Growth - - 48.29% 160.75% 5.35% 7.08% 11.97% 24.21% 11.02% -127.57%

Highly Competitive Industry over the past 10 years

It's likely that FOR is in an industry with low barriers to entry, spurring high competition. If Gross Margins are at least satisfactory, it's likely FOR invests heavily in R&D and Sales, General & Administrative expenses.

Only $4.08 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Net Income 51.84M 24.80M 11.97M 59.11M 5.13M 7.15M 17.88M 35.06M 17.09M -212.37M
divided by
Revenue 225.56M 177.99M 159.72M 146.25M 101.36M 135.57M 172.59M 331.05M 306.77M 262.42M
Net Profit Margin 22.98% 13.93% 7.50% 40.41% 5.06% 5.28% 10.36% 10.59% 5.57% -80.93%

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
2006200720082009201020112012201320142015
Gross Profit - - - - - - - - - -
divided by
Revenue 225.56M 177.99M 159.72M 146.25M 101.36M 135.57M 172.59M 331.05M 306.77M 262.42M
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.

168.41% 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
2006200720082009201020112012201320142015
Capital Expenditure - 3.20M 5.20M 7.30M 2.70M 6.35M 24.15M 107.90M 118.64M 64.41M
divided by
Net Income 51.84M 24.80M 11.97M 59.11M 5.13M 7.15M 17.88M 35.06M 17.09M -212.37M
Capital Expenditure Ratio - 12.90% 43.40% 12.34% 52.72% 88.73% 135.10% 307.74% 694.31% -30.33%

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
2006200720082009201020112012201320142015
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
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
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
2006200720082009201020112012201320142015
Shares Outstanding - 35.38M 35.89M 36.10M 36.38M 35.78M 35.48M 36.81M 43.60M 34.27M
Stock Bought Back - -100.00% -1.43% -0.58% -0.76% 1.67% 0.84% -3.62% -15.56% 27.23%
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