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Quick Take: Questions on Housing-Related IPOs

NEW YORK (TheStreet) -- Initial public offerings in the housing sector just keep coming, according to Francis Gaskins, research director for Equities.com and TheStreet's Debra Borchardt.

Take American Homes 4 Rent, a type of real estate investment trust that has had limited success in 2013. The company has filed for a $750 million offering size in the range of $16 to $18 per share and expects to trade under the ticker symbol, "AMH."

Gaskins said he's not really loving this one because of the poor performance of other stocks already in the sector. He added there appears to be a mistake in the company's SEC filing -- something he never likes to see -- with the capitalization being higher than the price-to-tangible-book value, which it should never be.

The second IPO is Control4 Corporation and again, Gaskins doesn't care for its prospects. The IPO has an offering size of $65 million, with shares in the $14.50 to $16.50 range and the company plans to trade under the ticker symbol, "CTRL."

Control4 sells equipment for homeowners that allow them to control security systems, lighting, heating and other features remotely away from home. While top-line growth was recently as high as 20%, Gaskins said the company has not been able to reach profitability.

Although the June quarter shows estimates for a $1.5 million gain, its pre-taxed income would give the company a PE ratio of 60. Gaskins concluded that one quarter does not represent consistency and that this is one to watch, but not buy.

-- Written by Bret Kenwell in Petoskey, Mich.

Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.

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