Friday File: Dreaming of NVR

Adding an IPO to the Real Money Portfolio, plus several other small buys and updates on Boston Omaha, Fastly, Power REIT and more...

By Travis Johnson, Stock Gumshoe, January 22, 2021

Bad news… Dream Finders Homes (DFH) did not partner up with Boston Omaha’s Yellowstone Acquisition SPAC (YSAC) to go public, as I had harbored some small hope they might… but good news, too, because DFH did go public this week, which came as a surprise to me on Thursday, since I hadn’t noticed the original SEC filings late last year. I bought a small stake as soon as I had read through the prospectus, as I noted in my email to the Irregulars yesterday.

The reason I know about and was willing to enter a Dream Finders position quickly, at what was admittedly a premium price (I paid about $19, the IPO priced at $13), is that I’ve been following mini-conglomerate Boston Omaha (BOMN) for a little over three years, and Dream Finders has been a private investment that they’ve raved about several times. This is an excerpt of my notes from the Boston Omaha Annual Meeting that I attended back in June of 2019 (which I guess is the last one they held in person):

“6/14/19: Dream Finders Homes has some potential to be really big.

“Dream Finders is about 5% owned by Boston Omaha, and it’s described by some as being an appealing ‘mini NVR’ — at least potentially. NVR is probably the most successful homebuilder in history, at least from an investment perspective, because of their discipline at sticking to areas where they can operate at scale and efficiently, and being genuinely “asset light” by buying only land options, not giant banks of actual land.

“Traditional homebuilders believe strongly in owning big chunks of land that give them the confidence that they’ll always have somewhere to build, and, they think, protect them in downturns… but it’s very inefficient.

“Dream Finders started in Jacksonville, FL, and they’ve been expanding by chunks — to Orlando, then with this latest acquisition up to the Carolinas, and they have some opportunistic bits of business in other areas. NVR is the acknowleged king of the rapid turnover in homebuilding, but that’s the goal for Dream Finders, and Boston Omaha likes them because they’re very entrepreneurial, and likes that they have most of their capital allocated to active construction and not land that just sits there.

“The talk in the meeting gives me the impression that they’d be happy to fund even more aggressive growth from Dream Finders and take a bigger ...

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