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Insider Trade During SEC Mandated ‘Quiet Period’ at Legacy Housing Corp

January 7th, 2019 No comments


LegacyHousingLogoLEGHlogoDuringSECQuietPeriodDailyBusinessNewsMHProNewsLogo

For those not ‘in the know’ about the SEC mandated quiet period, the prior report will help tee up the significance of this one today.

 

See that and more trading insights from late last week, in the linked text/image box below.

 

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

 

LEGACY HSG CORP/SH (NASDAQ:LEGH) Director Mark E. Bennett bought 27,000 shares of the company’s stock in a transaction that occurred on Friday, December 14th, reported the Fairfield Current. “The stock was purchased at an average price of $12.00 per share, for a total transaction of $324,000.00. The purchase was disclosed in a filing with the SEC, which is available at this hyperlink.”

It is an interesting move, during the stock’s SEC mandated quiet period.

The Friday evening Daily Business News on MHProNews market report’s Bloomberg ticker reported that Legacy rose over 3 percent on Friday.

LegacyHousingCorpLEGHFriday12.4.2019DailyBusinessNewsBloombergClosingTickerMHproNews2019-01-06_1619

Other Legacy and manufactured housing tracked stocks/market related information is available at this link here.  The same disclosures made Friday at this link here apply today. It is also worth noting that Legacy is bucking-the-tide from the industry at large noted in the related reports, further below.  “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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Manufactured Home Production Decline Accelerates in November 2018

 

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Manufactured Home Production Decline Accelerates in November 2018

 

 

 

 

 

 

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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To report a news tip, click the image above or send an email to iReportMHNewsTips@mhmsm.com – To help us spot your message in our volume of email, please put the words NEWS TIP in the subject line.

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

December 11th, 2018 Comments off

 

WhatOthersSayLegacyHousingCorpLEGHIPOSetfor12142018ManufacturedHousingIndustryDailyBusinessNewsMHProNews

The initial public offering – IPO – for Legacy Housing Corporation is set for 12.14.2018, per NASDAQ.

 

That makes this a good time to take a look at what they and others beyond the manufactured housing industry are saying about Legacy.

We like old-fashioned businesses. This one is in low-cost, manufactured housing. If you know what a “double-wide” is then you know what types of homes we are talking about here,” said Candyman of IPOCandy for TalkMarkets.

Any investor should respect the numbers Legacy (LEGH) is generating – $169M LTM revenues up 31%, 24% EBITDA margins and pre-tax ROE of 26%,” Candyman continues. “These levels of growth and profitability have been consistent over the last 10 years.”

ManufacturedHousingStocksLegacyHousingCorpLEGHDailyBusinessNewsMHProNews

 

Candyman then goes on to elaborate a point known by thousands of manufactured housing pros, and often plugged here on MHProNews or on MHLivingNews.com. Namely, the savvy of offering affordable homes during an affordable housing crisis.

 

LegacyHousingIPOdetailsPerNasdaqManufacturedHousingIndustryDailyBusinessNewsMHProNews

 

Considering Low Cost Housing

Housing is expensive, especially stick-built single family homes. For many Americans, a manufactured home is an excellent, low-cost solution. Demand for lower-cost housing has been very durable and it’s not just from low earners. As rents increase in greater metropolitan areas young adults are realizing that they may be better off owning, if they can find a “starter” property that they can afford. Often that won’t be a detached stick-built structure,” per TalkMarkets.

Other demand drivers are from community builders (described below) and as vacation homes requiring less investment and maintenance that a typical one family home,” adding, “Unit volume has been recovering since the US economic collapse in 2008 but still has room to expand further before nearing prior levels.”

 

ManufacturedHousingVsTotalCompletedHomesLegacyHousingS1FilingIPODailyBusinessNewsMHProNews

Legacy clearly believes in the future of the business, because they are raising capital to expand their retail base.  The chart above is more useful than the ones shown by other media. 

NASDAQ said, “Legacy Housing Corporation, formerly Legacy Housing, Ltd., 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 home 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 Institute for Building Technology and Safety for the second quarter of 2018.”

 

2018-12-11_1155TalkMarketsDailyBusinessNewsMHProNewsTopProducersHUDCodeManufacturedHomes

 

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. In 2017, we sold 3,274 home sections (which are entire modules or single floors). During the first nine months of 2018, we have sold 3,045 home sections. We commenced operations in 2005 and have experienced strong sales growth and increased our equity holders’ capital at a compound annual growth rate, or CAGR, of approximately 25% between 2009 and 2017. We currently have the largest backlog of orders in our company’s 13-year history.”

Donovan Jones writing for investors media outlet Seeking Alpha shared the following video from Legacy, and basically says they think this stock ought to be a buy.

 

Among the pull quotes Jones at Seeking Alpha cited was this:

Market & Competition

According to a 2016 release by the U.S. Census Bureau, the total manufactured homes market was valued at about $6.245 billion in 2007, marking a decline to about $5.8 billion in 2016.

The average sale price per manufactured house has risen from $65,400 in 2007 to $70,600 in 2016, while the total number of homes sold has declined from 95,752 in 2007 to 81,136 in 2016.”

ManufacturedHomesMadeInAmericaDataInfographicManufacturedHousingInstituteLogoMHILogoMHProNewsFactCheck

Graphic, including apparent errors, is by MHI. Their GDP, count is about 50 percent understated. There are also some 10 more manufacturing plants now than what’s shown. Some sources dispute the job count as too low for the total industry as well.

 

That GDP figure once more makes a point that MHProNews has made for over a year. Namely, that MHI is wrong, wrong, wrong in saying that the manufactured housing industry adds $3 billion to the economy.  As a short segue, does it seem that MHI wants to make manufactured housing seem smaller than it is?  MHI, per member Frank Rolfe, under-reports the number of land-lease communities by about 6,000.  Rolfe and his partner Dave Reynolds say that a “two year hand count” resulted in some 44,000 communities they identified, while MHI uses a number closer to 38,000 communities, which – no surprise – mirrors the figure that purportedly favored-member MHVillage provides.

 

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

Those details matter to companies that are emerging, such as Legacy, and others.

CurtisHodgsonKennyEShipleyLegacyHousingCorpCoFoundersLEGHIPOMHProNewsLegacy was co-founded by Curtis D. Hodgson and Kenny E. Shipley, and per NASDAQ, “Our homes address the significant need in the United States for affordable housing. This need for affordable housing is being driven by a nationwide trend of increasing rental rates for housing, higher prices for site-built homes and decreasing percentages of home ownership among portions of the U.S. population. Our customers typically have annual household incomes of less than $60,000 and include young and working class families, as well as persons age 55 and older. In 2016, there were approximately 63,799,000 households in the United States with annual household incomes of less than $60,000, representing a majority of all U.S. households, according to the Current Population Survey and 2017 Annual Social and Economic Supplement published by the U.S. Census Bureau.”

AvgPriceDifferenceConventionalHousingVsManufacturedHomesLegacyHousingLEGH-S1IPOFilingDailyBusinessNEwsMHProNews

We believe our company is one of the most vertically integrated in the manufactured housing industry, allowing us to offer a complete solution to our customers, from manufacturing custom-made homes using quality, cost effective materials and distributing those homes through our expansive network of independent retailers and company-owned distribution locations, to providing tailored financing solutions for our customers. Our homes are constructed in the United States at one of our three manufacturing facilities in accordance with the construction and safety standards of the U.S. Department of Housing and Urban Development (“HUD”). As of the date of this prospectus, our factories employ high-volume production techniques that allow us to produce, on average, approximately 75 home sections, or 62 fully-completed homes depending on product mix, in total per week. We use quality materials and operate our own component manufacturing facilities for many of the items used in the construction of our homes. Each home can be configured according to a variety of floor plans and equipped with such features as fireplaces, central air conditioning and state-of-the-art kitchens,” said NASDAQs review.

LegacyHousingSampleInventoryManufacturedHousingIndustryDailyBusinessNewsMHProNews

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

Nasdaq goes on, “Our homes are marketed under our premier “Legacy” brand name and, as of September 30, 2018, are sold primarily across 15 states through a network of 115 independent retail locations and 11 company-owned retail locations and through direct sales to owners of manufactured home communities. Our 11 company-owned retail locations, including our nine Heritage Housing stores and two Tiny House Outlet stores, exclusively sell our Legacy branded homes. During 2017, 62% of our manufactured homes were sold in Texas, followed by 8% in Georgia, 8% in Colorado, 5% in Oklahoma, and 4% in Louisiana. For the nine months ended September 30, 2018, our largest sales occurred in Texas (59%), Georgia (12%), Louisiana (9%), and Oklahoma (4%). We plan to deepen our distribution channel by using a portion of the net proceeds from this offering to expand our company-owned retail locations in new and existing markets.”

We offer three types of financing solutions to our customers. We provide floor plan financing for our independent retailers, which takes the form of a consignment arrangement between the retailer and us. We also provide consumer financing for our products which are sold to end-users through both independent and company-owned retail locations, and we provide financing to manufactured housing community owners that buy our products for use in their housing communities as rental units. Our ability to offer attractive financing options provides us with several competitive advantages and allows us to capture sales that may not have otherwise occurred without our ability to offer consumer financing.”

We were originally organized in May 2005 as Legacy Housing, Ltd., a Texas limited partnership. Effective January 1, 2018, we converted into a Delaware corporation and changed our name to Legacy Housing Corporation, which is referred to herein as the Corporate Conversion,” adding, “Our principal executive offices are located at 1600 Airport Freeway, #100, Bedford, Texas 76022, and our telephone number is (817) 799-4900. You may access our website at www.legacyhousingcorp.com.”

That’s MH “Industry News, Tips, and Views that Pros Can Use,” © 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.

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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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