I Wish This Were an Intriguing IPO: Smith Douglass Homes Corp. (SDHC)

The 2024 IPO market will kick off with a homebuilder with a great story, but a rotten core.

Saint Joseph the Carpenter, Georges de la Tour, circa 1642, oil on canvas (The Louvre)

When I conceived of writing a semi-regular piece on IPOs, I honestly thought there would be more interesting companies to discuss that we could all put on our radar. I didn’t expect this recurring piece to become a lesson in finding the various types of mines buried in prospectuses.

And yet here we are.

The one company going public is one that I wanted to get behind. Homebuilder Smith Douglas Homes. Homebuilding is one of those industries I see as structurally set to deliver fantastic returns for almost anyone who invests in this industry.

Unfortunately, despite a highly favorable industry and story that Wall Street will love, there is one component of the business that, in my opinion, should make individuals seriously reconsider ever taking a position in the company. 

Let’s dig in.

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