Also, this is a growing campany, and is why it is on Sauls radar at all. In this case they have roughly 25000 lots in inventory but are selling only about 5000 a year, but this is a double from 2 years ago. If they are going to continue to grow at this rate they will be selling 10000 homes a year in two year. At that rate they only have 2.5 years inventory.
They have 29,460, lots. They expect to sell 4700 homes, but the growth rate is slowing.
In 2014 they sold 2356 homes.
In 2015 they sold 3404 homes. Up 44.5%.
In 2016 they sold 4163 homes. Up 22.3%.
In 2017 they expect to sell 4700 homes. Up 12.9%.
Unit homes growth has been about cut in half every year. There’s no way this company can afford to build 10,000 homes per year in 2 years without taking on massive amounts of additional debt or issuing a ton of new shares. They don’t need 29,460 lots right now or for a long time.