Standard Pacific Corp. (NYSE:SPF) strugles to regain momentum post


Dallas, Texas 09/17/2013 (Financialstrend) – The last five days of trading have been a roller coaster ride for Standard Pacific Corp. (NYSE:SPF). It began September11 trading at $7.7 before slipping to $7.59 on September13 before recovering to end at $7.8. At the beginning of the new week, the share shot up by $7.97 before sliding through the day to end at $7.79.

This volatility can be traced back to its August 6 announcement indicating its signing of underwriting agreement with Citigroup and Credit Suisse Securities with regards to issuance of $300 million senior notes  which are payable in 2021. The company has offered to pay 6.25% interest per year. The interest payout will happen twice a year beginning December’13. The company has also retained the option to redeem part or whole of the notes before the December 2012 due date. The company is planning to use the proceeds thus raised to expand its business operations including land acquisitions and stepping up its construction activities.

Standard Pacific diverse business interests span many of the housing markets of metropolitan California, Florida, North and South Carolina, Texas, Arizona, and Colorado. The Company’s operations are bundled under two broad businesses heads. These are homebuilding and financial lending (mortgage financing). The company has a market capitalization of $2.15 billion with 276 million outstanding shares. The shares are trading 21% lower than its prior 52 week high valuation and 36% higher than its 52 weeks low.

The investors have been staying away from this stock since July 27 when it announced its second quarter results.  For its 2Q13 which ended on June 30, new home deliveries were up 34%, net new orders which are indicative of future cash flow  was up 37%, home sale revenues went up by 58% and homes in backlog were also up 79% in comparison to 2Q12. Net income in 2Q was $43.1 million, which is significantly higher than the $14.3 million the company had registered in 2Q12.

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