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Legacy Housing IPO (LEGH) Quiet Period Set to Expire, SA’s Don Dion

January 4th, 2019 Comments off

 

LegacyHousingIPOLEGHQuietPriodSetExpireSADonDionManufacturedHousingTinyHomeDailyBusinessNewsMHProNews

Don Dion on Seeking Alpha provided an executive summary goes like this.

 

LEGH’s quiet period is set to expire on Jan. 8, 2019.

Our research has demonstrated that prices enjoy a temporary increase around the expiration of quiet periods.

Risk-tolerant investors should consider buying shares ahead of LEGH’s quiet period expiration,” said Dion on SA.

 

Dion provides a disclaimer, which read as follows:

Disclosure: I am/we are long LEGH. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.” Dion also says of himself, “Long/short equity, special situations, momentum, event-driven.”

By contrast, MHProNews has done business with Legacy, as well as some of those who sell Legacy products, but only on a marketing basis. That said, the Daily Business News on MHProNews wasn’t asked or commissioned to do this review. We curate and compose articles on subjects that our management deems relevant to our industry.  Our timing and curation are solely ours. Legacy will be as surprised as you are that this our next report.

 

Why Legacy and Why Now?

Legacy, as Dion noted, “manufactures, sells, finances, and distributes tiny homes and manufactured houses through a network of [retail] stores throughout the U.S. It is the fourth largest company in the U.S. that produces manufactured homes…”

LegacyHousingSampleInventoryManufacturedHousingIndustryDailyBusinessNewsMHProNews

From Legacy Housing (LEGH) S1. See full S1 as a download, linked here.

 

That’s later statement by Dion is not quiet accurate, as LEGH have no known presence in the West, Alaska, Hawaii or other U.S. locations. Legacy is focused more on the South Central, South Eastern and Midwestern states, with their website having the full details.

While the HUD Code manufactured home industry’s latest production report indicates that manufactured housing took a dip in November, Legacy reported as part of their IPO filing that they have their largest backlogs in their firm’s history.

The purpose of the LEGH IPO was to raise capital for more company-owned distribution. Meaning, more vertically integrated retail centers.

That’s something that other producers of HUD Code manufactured homes, modular housing, or ‘tiny’ park model style homes are also doing or considering.

 

 

As one of the sources in the Going Vertical article linked form the text/image box above has told MHProNews, not a day goes by that they don’t consider going vertical themselves.

Legacy isn’t just considering it. They are taking action. That’s what co-founders and co-presidents of Legacy Ken E. Shipley and Curt D. Hodgson are known for doing. Acting, not just talking.

 

CurtisHodgsonKennyEShipleyLegacyHousingCorpCoFoundersLEGHIPOMHProNews

SA’s Dion correctly notes they are the number four producer of HUD Code manufactured homes, per the LEGH IPO data, adding:

The homes range in price from $22,000 to $95,000 and in size from 390 square feet to 2,667 square feet. Legacy Housing reports that it sold 3,274 sections in 2017 and 3,045 sections during the first nine months of 2018.”

 

ManufacturedHousingVsTotalCompletedHomesLegacyHousingS1FilingIPODailyBusinessNewsMHProNews

Legacy clearly believes in the future of the business, because they are raising capital to expand their retail base.

AvgPriceDifferenceConventionalHousingVsManufacturedHomesLegacyHousingLEGH-S1IPOFilingDailyBusinessNEwsMHProNews

A report last night, linked here, reveals that even with much higher pricing, conventional housing didn’t dip as HUD Code manufactured homes did. Again, Legacy and others are bucking the trend, which means others in MHVille and/or investors can too.

 

That’s the kind of growth the industry at large should be achieving. That’s one of the reasons we selected this topic. Investors are among the readers here, because as Evergreen’s —— said on Forbes recently, there is a serious lack of accurate information available about manufactured housing.  Thank you so much, Manufactured Housing Institute, which claims to represent all aspects of factory built housing. Seriously?

Yeah…right. Here is now a quiet period is defined.

 

Dion said that “Legacy Housing priced at $12 after setting a price range of $10.75 to $12.75. During its market debut on Dec. 14, the company’s stock closed at $12.10. LEGH reached a high of $12.5 briefly on Dec. 17 before falling back to close at $12.20 that day,” which may be accurate, but the stock has been under $12 during the broader market’s recent slide.

 

Here above are the closing numbers for last night, from our evening market report on a basket of manufactured home industry-connected tracked industry stocks that are publicly traded.

Among those every-business-evening tracked manufactured home connected stocks is Third Ave Value Fund.  Third Ave, in the later part of 2018, reportedly shed all of their shares of Cavco Industries. That occurred shortly before a Cavco insider told MHProNews about the Joe Stegmayer connected “Debacle.” Cavco has been trading at less than half of their prior high for the last 12 months.  While the two operations are quite different, it is an interesting data-point.

 

 

More on Third Avenue and Cavco are found at the linked text/image box below.  Hint, the SEC being part of the federal partial shut down may be a breather for them, but there are several shareholder plaintiffs attorneys circling around CVCO.

 

Hedge Fund’s Cavco Move, and More from Inside MHVille

 

You can see the rest of Dion’s 2 pages of commentary are this link here.  As noted above, some of his insights are fine, others may need some factual tweaks.  So caveat emptor.

 

 

Take Aways?

The points or take-aways of this report are several. Let’s just look at a few.

  • The industry in general’s slow down is inexcusable, in as much as there is an affordable housing crisis, and HUD Code manufactured homes are the most affordable type of permanent housing in America.
  • Legacy is bucking-the-trend. While some producers, or MHI mouth pieces – and those two are not the same sets of people – have given us their reasons for the downturn, it’s arguably excuses or a cop out. Others, not just Legacy, are growing in their local markets. If others can, then logically others who do things properly should be able to do so too.
  • The Manufactured Housing Association for Regulatory Reform (MHARR) about 14 months ago published a formal report calling for a new post-production trade organization. They did a detailed review as to why they made that recommendation to the industry-at-large.
  • Indeed, since then a new communities trade group has launched. The jury’s hasn’t yet convened, much less ruled on that trade association. Some think that just because it isn’t MHI, that alone is enough. NMHCO has hired Tom Heinemann as a lobbyist.  formerly with HUD, MHI, and who consulted with a GSE. Will those be good credentials? Or will they prove to be problematic? MHProNews will observe, and keep you posted. The proof is always beyond the words, in the doing.

 

MHARR Releases Study Recommending Independent Collective Representation for Post-Production Sector

 

 

 

 

 

Profitable, Ethical Solutions

The solution to the affordable housing crisis is hiding in plain sight. We’ve said that for years, and others in media are picking that theme up. But it can’t be a few times a year message. It’s one that must be repeated often in local markets, like yours.

Sunshine Homes proved they could buck the trends, Legacy Housing are doing the same – each with entirely different product lines. You are either defining yourself in your market, or something else is going to do it for you. In the later case, that may be to the detriment of your interests. “We Provide, You Decide.” © ## (News , analysis, and commentary.)

 

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SoheylaKovachDailyBusinessNewsMHProNewsMHLivingNewsSubmitted by Soheyla Kovach to the Daily Business News for MHProNews.com. Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.

 

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With Storm Clouds Over Cavco, Eyes on Legacy Housing (LEGH) IPO Today

December 14th, 2018 Comments off

 

StormCloudsOverCavcoEyesonLegacyHousingLEGHIpoTodayNasdaqMHProNews

The timing of the Legacy Housing IPO is an interesting.

 

The firm is attracting attention on its own merits from investors and analysts, who – for example – note that the two principles will have some 57 percent of the stock. The solid growth track-record for Legacy (LEGH), having their own financing available, a combination of both vertical retail and independent distribution are among the talking points.  More detailed reports are found by clicking on the box linked below.

 

What Others Say – Legacy Housing Corp (LEGH) IPO Set for 12.14.2018

 

But beyond the firm’s own credentials for the launch today on the tech-heavy NASDAQ, are other factors that can sway investors.  The affordable housing crisis plus the obvious merits of manufactured homes (MH) are talking points that manufactured home community REITs and MH producers alike point to in their investor relations packets.

 

ManufacturedHomeCommunityREITsManufacturedHousingIndustryDailyBusinessNEwsmHProNews

 

There is no doubt that the manufactured housing market has proven to be a durable one.

 

Sun Communities Strategic Investment in Ingenia Communities, Info, Videos Beyond the Release, Plus Manufactured Home Industry Market Updates

 

For those investors who are already sold on manufactured housing, the purportedly self-inflected storm-clouds over Cavco Industries (CVCO) – for example – is a possible attraction for those who may want to hedge their portfolios by investing in LEGH.

 

Legal “Incoming” – Tip on Cavco Industries CVCO, plus Manufactured Housing Industry Connected Stock Updates

 

But there are also what could be arguably be deemed artificial headwinds that Berkshire  Hathaway brands operating in manufactured housing, and also through the Clayton Homes et al dominated Monopolistic Housing Institute (MHI), err, pardon the typo, the Manufactured Housing Institute (MHI) to consider.

 

It’s Your Profession – Investment of Time, Talent, Treasure – So What’s Next?

 

There is apparently more antitrust talk coming out of Washington, D.C. that at any time in recent years. The FAANG stocks and Warren Buffett led Berkshire itself are on the radar of federal regulators. Berkshire’s “Moat” strategies are becoming better understood by mainstream media, and has been spotlighted here on MHProNews in a depth not found elsewhere.

 

Draft EO for Trump Administration AntiTrust Order Obtained by MHProNews

 

Legacy and privately held Sunshine Homes have demonstrated above average growth by taking their future into their own hands by engaging in marketing apart from MHI. That’s something savvy investors should like.

2018-12-14_1449LegacyHousing1MHProNews

 

2018-12-11_1155TalkMarketsDailyBusinessNewsMHProNewsTopProducersHUDCodeManufacturedHomes

As noted above, this illustration was NOT sent by those providing the respective tips and comments, but is provided by MHProNews to underscore points those sources have made.

 

With several federal and other investigations reportedly underway against Clayton Homes, 21st Mortgage Corp (21st), and Vanderbilt Mortgage and Finance (VMF), is this the time for manufactured housing to break free of the iron grip of Berkshire? Will a combination of feds and other potentially looming legal actions against Berkshire brands and/or MHI be a boon to manufactured housing independents, like Legacy?

 

Whistleblower! Ex-Clayton Homes Team Member on TV Denounces Manufactured Housing Giant’s Practices

 

Time will, of course, tell. Clearly, the principals of Legacy apparently believe so.

They are not alone, as others have taken the regulatory rollbacks of the Trump Administration and his antitrust signals seriously.  A few other new manufacturers have also launched.

Legacy Housing IPO, Lending Tree, & New HUD Ruling Updates

And with Legacy’s recent marketing and educational efforts yielding their biggest backlogs ever, per their own filings, this will be an interesting day for traders and the industry. Many will be keeping an eye on Legacy (LEGH) during and at the close of the day, and naturally some will be jumping on their bandwagon.

ManufacturedHousingStocksLegacyHousingCorpLEGHDailyBusinessNewsMHProNews

Legacy Housing Files for IPO, Plus Manufactured Housing Industry Market Updates

ManufacturedHousingVsTotalCompletedHomesLegacyHousingS1FilingIPODailyBusinessNewsMHProNews

Legacy clearly believes in the future of the business, because they are raising capital to expand their retail base.

As a disclosure, MHProNews has no position in any of the tracked stocks in manufactured housing, and has no plans to initiate a position in the next few days. Our reports are independent, which is perhaps among the reasons why we are the runaway most read trade media in all of manufactured housing. “We Provide, You Decide.”

 

LegacyHousingAnnouncesPrincingIPODailyBusinessNewsMHProNews

DALLAS, Dec. 14, 2018 (GLOBE NEWSWIRE) — Legacy Housing Corporation (Nasdaq: LEGH), the fourth largest producer of manufactured homes in the United States and a recognized leader and innovator in the manufactured housing industry, announced today the pricing of its initial public offering of 4,000,000 shares of common stock at a public offering price of $12.00 per share.  The gross proceeds of the offering, before deducting underwriting discounts and commissions and other offering expenses payable by Legacy Housing, are expected to be $48.0 million.  All of the common stock in the offering is being offered by Legacy Housing. Legacy Housing has granted the underwriters a 30-day option to purchase up to an additional 600,000 shares of Legacy Housing common stock at the initial public offering price, less underwriting discounts and commissions.

Legacy Housing intends to use the net proceeds of the offering to expand its retail presence in the southern United States and surrounding geographic markets, provide financing solutions to select housing community-owner customers, repay debt and pursue possible acquisitions, and use the remainder for working capital and general corporate purposes.

Legacy Housing’s common stock is expected to begin trading on The Nasdaq Global Select Market on December 14, 2018, under the ticker symbol “LEGH.”  The offering is expected to close on December 19, 2018, subject to satisfaction of customary closing conditions.

The offering is being made through an underwriting group led by B. Riley FBR, Inc., Oak Ridge Financial and National Securities Corporation, which are acting as joint book-running managers for the offering.

A registration statement relating to the shares being sold in this offering was declared effective by the Securities and Exchange Commission on December 12, 2018.  This offering is being made only by means of a prospectus.  Copies of the final prospectus related to this offering may be obtained, when available, from: B. Riley FBR, Inc., Attention: Prospectus Department, 1300 14th Street North, Suite 1400, Arlington, VA 22209, or by telephone at (800) 846-5050 or by email at prospectuses@brileyfbr.com; Oak Ridge Financial, Attention: Joseph Sullivan, 701 Xenia Avenue South, Suite 100, Golden Valley, MN 55416, or by telephone at (800) 231-8364 or by email at jsullivan@oakridgefinancial.com; or National Securities Corporation, Attention: Marguerite O’Brien, 200 Vesey Street, 25th Floor, New York, NY 10281, or by telephone at (212) 417-8164 or by email at prospectusrequest@nationalsecurities.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Legacy Housing Corporation

Legacy Housing Corporation builds, sells and finances manufactured homes and “tiny houses” that are distributed through a network of independent retailers and company-owned stores and are sold directly to manufactured housing communities. We are the fourth largest producer of manufactured homes in the United States as ranked by number of homes manufactured based on information available from the Manufactured Housing Institute and IBTS for the second quarter of 2018. With current operations focused primarily in the southern United States, we offer our customers an array of quality homes ranging in size from approximately 390 to 2,667 square feet consisting of 1 to 5 bedrooms, with 1 to 3 1/2 bathrooms. Our homes range in price, at retail, from approximately $22,000 to $95,000.

Forward Looking Statements

This press release contains forward-looking statements, including with respect to the expected closing of Legacy Housing’s initial public offering.  These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including that the conditions to the closing of the initial public offering are not satisfied.  Legacy Housing undertakes no obligation to update any such forward-looking statements after the date hereof, except as required by law.

Source: Legacy Housing Corporation

Investor Inquiries:

Neal Suit, (817) 799-4906
investors@legacyhousingcorp.com

LegacyHousingSampleInventoryManufacturedHousingIndustryDailyBusinessNewsMHProNews

From Legacy Housing (LEGH) S1. See full S1 as a download, linked here.

 

That’s this morning’s “News Through the Lens of Manufactured Homes, and Factory-Built Housing,” © where “We Provide, You Decide.” © ## (News, analysis, and commentary.)

NOTICE: Readers have periodically reported that they are getting a better experience when reading MHProNews on the Microsoft Edge, or Apple Safari browser than with Google’s Chrome browser. Chrome reportedly manipulates the content of a page more than the other two browsers.

(Related Reports are further below. Third-party images and content are provided under fair use guidelines.)

1) To sign up in seconds for our MH Industry leading emailed news updates, click here.

ManufacturedHomeIndustry#1HeadlineNewsMHProNews

To see a sample of our emailed news update, click here. To sign up for the factory-built home industry’s #1 headline news, click here or the graphic above.

2) To provide a News Tips and/or Commentary, click the link to the left. Please note if your comments are on-or-off the record, thank you.

3) Marketing, Web, Video, Consulting, Recruiting and Training Re-sources

SoheylaKovachDailyBusinessNewsMHProNewsMHLivingNewsSubmitted by Soheyla Kovach to the Daily Business News for MHProNews.com. Soheyla is a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com.

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