TOL announced a company restructure back in May that is due to kick in this year. Reducing divisional reporting lines from 6 to 5 is supposed to save $10 to $12M pa - percentage wise not a significant saving compared to their FY 2014 Net Income of $286.1M. They are moving from an M&A growth model to focus on a ROC model. Only 7% of their revenues are mining dependent, so current activities should not be impacted too heavily by current commodity weakness. Stocks in Value have decreased TOL's Required Return, reflecting a decreased risk profile because of these changes. Reduced growth from decreased M&A should be counterbalanced with increased efficiencies.
TOL Price at posting:
$5.91 Sentiment: None Disclosure: Held
