A. MANAGEMENTS EFFECTIVENESS - GOOD

How well a company performs generally - in its business operations, controlling costs,  the success of its products and services in the market place, profitability, and the like - depends on its management's efficiency. Return on Equity ( ROE) is used as a general indication of the company's efficiency.

BMHC's ROE (ttm) of 16.4% is slightly lower than the Industry's ROE of 18.9 but slightly higher than the S&P 500's ROE of 14.3%. (Ref.: MSN Finance\Ratios).

ACE'S gives a preferential rating to a company that has a comparable or relatively higher ROE than the Industry. ACE'S rating of BMHC's Management's Effectiveness: GOOD.
 

B. PRODUCTS & SERVICES - GOOD LINE-UP

Products and services are the elements that enables a company to have a presence in its target market and generate sales. What products and services the company has and how successful those products and services performs in the target market are very important factors in considering a company's stock for investment.

BMHC's line-up of Products & Services. BMC Construction services: Labor management, materials procurement & handling, risk management, component manufacturing, project estimation, shell construction, structural engineering and millwork installation. BMC West: Professional grade building materials (lumber, siding, roofing, insulation, windows, doors, cabinets, tools and supplies), millwork, trusses and installation (of doors, windows, stairs, interior trim, siding and insulation). BMHC's line-up of Products & Services are described in more detail at the Company's website: http://www.bmhc.com/services.asp.

ACE'S  gives a preferential rating to a company who  have more than one products and services  that have present and continued  utility in a broad and dynamic  market. An estimation of the latter products' utility, distinctive qualities and competitiveness would be subjective assessments. However, there is one objective data that indicates how well the subjective elements of BMHC's products and services are assessed and used by its target market - the company's sales.

ACE'S rating of BMHC's line-up of Products & Services: A GOOD


C. SALES - GOOD

Sales is an important indicator on how a company's products and services performs in its target market. Generally, a high sales figure is preferred than a lower figure. Also, a steady and appreciable growth in a company's total sales from one year to the next is a key indicator on how a company is able (or unable) to sustain and improve the utility of its products and services in the marketplace.

BMHC's annual sales have progressively increased in the past 5 years; $1,014M in 2000; $1,093M in 2001; $1,162M in 2002; $1,415M in 2003; and $2,091M in 2004. (Ref.: MSN Money\Financials).  BMHC's 2004 annual Sales of $2,091M is lower  compared to the Industry's $16,516M. However, in terms of growth, BMHC's 2004 Sales had a growth rate of 47.80% whereas the Industry's was a mere 0.90% (Ref.: MSN Money\Research).

ACE'S gives a preferential rating to a company that have demonstrated the ability to sustain a high and progressively increasing level of total sales  from year-to-year.  ACE'S rating of BMHC's Sales: GOOD.
 

In terms of EPS, the Company have maintained an average Earnings/Share of $2.085 annually since 2001: $1.59 in 2001; $1.41 in 2002; $1.48 in 2003 ; and $3.87 in 2004. The Company's EPS (YTD) growth rate of 170.50%, an excellent growth rate,  have outperformed the Industry's rate of 1.70%. (Refs.: MSN Money\Financials\Statements;  MSN Money\Financials\Ratios)

ACE'S gives a preferential rating to a company that have demonstrated the ability to sustain a positive, appreciable and increasing net  income  from year-to-year. ACE'S rating of BMHC's Profitability: GOOD.

F. PRICE-EARNINGS RATIO (P/E) - GOOD

A stock's Price-Earnings ratio tells us roughly how much investors are willing to pay per dollar of earnings. Price-Earnings is a ratio of a company's current share price compared to its per-share earnings. The P/E ratio is a much better indicator of the value of a stock than the market price alone.

In general, a high P/E means high projected earnings in the future. As such, the P/E ratio could be interpreted as the reflection of the market's optimism concerning a firm's growth prospects. To determine whether a particular P/E is high or low, take into account a company's growth rates; and the P/Es of other companies in the same industry. Historically, the average P/E ratio in the market has been around 15-25.

BMHC has a P/E ratio of 12.00 (ttm) which is below the Industry's P/E of 16.20 (ttm) (Ref.: Yahoo! Finance\Competitors)

ACE'S gives a preferential rating to a company that has a comparable or relatively lower P/E than the Industry.  ACE'S rating of BMHC's P/E Ratio: GOOD.


G. FINANCIAL HEALTH - DEBT HIGHER THAN (INDUSTRY)AVERAGE

The assumption of debt, i.e., financial leverage, are used by companies to finance its assets. The magnitude of the debt's expense component affects the company's net income.

A company with significantly more debt than equity is considered to be highly leveraged. A popular measure of financial leverage is the "debt/equity ratio". A higher debt/equity ratio generally means that a company has been aggressive in financing its growth with debt. This higher ratio can result in volatile or negative earnings as a result of the additional interest expense. Thus, the Debt/Equity Ratio is popularly used as a measure of a company's financial health.

BMHC's Debt/Equity Ratio (latest 12 months), is 0.63. BMHC's ratio is higher than the Industry's ratio of 0.14 but lower than the S&P 500's ratio of 1.20.. (Refs.: MSN Money\Ratios)

ACE'S gives a preferential rating to a company that has a comparable or relatively lower debt ratio than the Industry.  ACE'S rating of BMHC's  Debt Ratio: HIGHER THAN (INDUSTRY) AVERAGE
 

H. MARKET CAPITALIZATION - GOOD

Market Capitalization (or market cap for short) is a measure of a company's size. The market cap provides a broad gauge of the growth-versus-risk potential of a company. Historically, large caps have experienced slower growth with lower risk; whereas small caps have experienced higher growth potential, but with higher risk.

The market cap of a company is calculated by multiplying the number of its outstanding shares by the shares' current market price. There are presently six classes of Market Cap: Mega Cap, Big/Large Cap, Mid Cap, Small Cap, Micro Cap and Nano Cap.

BMHC is a small cap company with a market capitalization of $652.20M with outstanding shares of 14.03M. .(Refs.: Yahoo! Finance\Profile; Yahoo! Finance\Statistics)

ACE'S gives a preferential rating to small and mid cap companies.  ACE'S rating of BMHC's  Market Cap: GOOD.


I. TRADED VOLUME - GOOD

A stock's price goes up or down based on the laws of supply and demand. Simply stated, when a stock's price goes up, there must be significant buying demand for the stock. Volume is the actual number of shares traded daily. Traded volume could be used as a gauge of the demand for a stock.

BMHC has an 3-month Average Volume of 187,090 shares; and a 10-day Average Volume of 169,000 shares. BMHC traded 155,600 shares on 4/12/2005. (Refs.: Yahoo! Finance\Statistics)

ACE'S gives a preferential rating to a company that sustains a lively trade volume from week-to-week and month-to-month.  ACE'S rating of BMHC's  Traded Volume: GOOD.

J. PRICE GROWTH - EXCELLENT

Price growth  is the 52-week increase in the price of a stock (displayed as a percentage). As of 4/11/05, BMHC had a Price Growth of 158.71%, which is  excellent. (Refs.: MSN Money\Research).

ACE'S gives a preferential rating to a company that have demonstrated a solid capacity for high price growth. ACE'S rating of BMHC's  Price Growth: EXCELLENT.