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Skyline Champion Soared, What’s Up? Initial Look Behind the Curtain

May 24th, 2019 Comments off

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The Motley Fool is an investment site that has reportedly drawn the ire of industry leaders such as Joe Stegmayer, former president and chairman of Cavco Industries and still MHI Chairman, on more than one occasion. Indeed, such stock and financial news sites, including Seeking Alpha, are often a mixed bag of useful and problematic reports – in part because those writing their analysis may get financials or certain details correct, but may still lack the manufactured home industry specific insights that could make their reporting better.

 

Rephrased, as with our sources we track, MHProNews takes a ‘wheat and chaff’ approach to their narratives.

With that brief backdrop meant for our growing audience, the Daily Business News on MHProNews turns to a report Wednesday by the Fool’s Lou Whiteman, who disclosed that he “has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.” MHProNews uses a similar disclosure.

As MHProNews has customarily done for years, we often turn quoted text bold and brown to make it pop, but the quotes are otherwise as in the original.

 Whiteman said in the report found at this link here that, “Another strong earnings report provides evidence the company’s 2018 acquisition is paying dividends.”

That should be understood in the light of the graphic below, which reflects the 1 year trend on Skyline Champion’s (SKY) stock’s value.

SkylineChampionStock5232019TickerManufacturedHousingIndustryMHProNews

 

That noted, before diving into the specifics of Whiteman’s analysis of the SKY stock’s recent moves, in the wake of an upbeat report, let’s focus on this pull quote.

Consistent with our [The Motley Fool’s] previous comments, we remain positive on the outlook for manufactured housing industry, as we see significant runway for continued growth. Industry volumes remain well below the long-term averages, and new financing options are becoming available and are slowly helping close the gap with those historic trends.”

That’s a point that most HUD Code manufactured home industry professionals can agree with, and take some heart in.

BloombergShipmentProductionDataManufacturedHousingMHProNews2019-05-16_1057

But that too must be understood in the light of significant evidence of market manipulation, which is arguably at the heart of why Skyline Champion – or most any other manufactured housing firm – are underperforming.  One of several possible examples a newcomer can begin to research is linked below.

 

 

The following graphic is a composite from the firm’s website.

 

SkylineChampionByTheNumbersSKYmanufacturedhousingDailyBusinessNewsMHproNews

 

That said, back to Whiteman’s narrative. The bullets represent quotes under the subheadings from the Motley Fool.

What happened

  • Shares of Skyline Champion (NYSE:SKY) climbed 13.9% on Wednesday, after the manufacturer of modular homes reported quarterly results that suggest the company is performing well following a major acquisition last year.

So what

 

  • On Tuesday after the markets closed, Skyline Champion reported fiscal fourth-quarter earnings of $0.26 per share on revenue of $327.7 million, beating the $0.20-per-share consensus earnings estimate despite falling short of the $344.22 million in expected sales. The company was created last June through a merger between Skyline and Champion Enterprises, which created the nation’s largest publicly traded factory-built-housing company.
  • Net sales in the quarter grew 23% year over year, and U.S. sales led the way with 35% growth. Skyline Champion reported both a 15% increase in total number of U.S. transactions and a 17% increase in average selling price, as a result of strong demand and favorable product mix. In Canada, sales fell 17% because of a decline in homes sold.
  • This is Skyline Champion’s second straight quarterly beat.

Now what

 

  • CEO Keith Anderson, on a post-earnings call with investors, said the manufactured-housing market in recent years has grown faster than the broader housing industry. He added that the company expects growth to continue into the new fiscal year:

  • Skyline Champion ended the quarter with a backlog of $143 million, down slightly from $155 million a year prior, but the company says the current total is higher quality because it doesn’t include inflated orders for lower-margin Federal Emergency Management Agency residences.
  • Based on the stock reaction, investors seem to believe Skyline Champion is building on a solid foundation.

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To reiterate in a different way, investors in stocks like SKY ought to demand investigation followed by action about purported market manipulation.  The Fool is right in saying there is plenty of upside, but it could be achieved faster and with hefty returns, in the absence of concerns such as those linked herein and below.  That’s not only the expert view here, but by others in the industry, as the reports further below reflect.

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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 or Comments or Letter to Editor in the subject line.

 

Special Skyline Champion Report Ahead

MHProNews plans a special report on Skyline Champion in the days ahead. Watch for it. For a prior and other related reports, see below the byline, offers, and notices.

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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.

That’s this morning’s second look at “News through the lens of manufactured homes, and factory-built housing” © where “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 or Comments or Letter to Editor in the subject line.

NOTICE: You can get our ‘read-hot’ industry-leading emailed headline news updates, at this link here. You can join the scores who follow us on Twitter at this link. Connect on LinkedIn here.

NOTICE 2: 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 do.

(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 pro-vide a News Tips and/or Commentary, click the link to the left. Please note if comments are on-or-off the record, thank you.

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