Pennsylvania Governor Tom Wolf’s (D) office has provided the following media release to MHProNews about the expansion plans announced by Cavco Industries (CVCO) in their state. The expansion is at the previously independently owned facilities of The Commodore Corporation (TCC), which were acquired by Cavco last year. It is against the backdrop of the expansion announced by Wolf and Cavco that the Simply Wall Street report is analyzed by MHProNews. The broader Daily Business News on MHProNews market report will follow that segment of today’s featured reports.

 

Governor Tom Wolf – Cavco Selects Pennsylvania to Expand Manufacturing Operations, Will Create 55 New Jobs

March 28, 2022

Governor Tom Wolf announced today that Cavco Industries Inc., one of the nation’s largest manufactured home builders, has chosen to expand its national manufacturing operations in Pennsylvania, creating 55 new jobs and retaining 607 total existing positions over the next three years. Cavco recently purchased The Commodore Corporation, now known as Commodore Homes LLC, which has three home production facilities in Clarion and Butler counties.

“Having a nationally recognized company like Cavco choose to expand their operations in Pennsylvania sends a very clear message to other businesses about the strength of our manufacturing sector,” said Gov. Wolf. “We are pleased to support this expansion project that will create and retain a total of 662 jobs and provide a significant boost to the local economies.”

Cavco and Commodore Homes LLC will continue to invest and expand operations at all three facilities – 4 Pennwest Way, Emlenton (Butler County) and 20898 & 20510 Paint Boulevard, Shippenville (both in Clarion County). The company’s investment in the expansion project will include construction, renovation, equipment and infrastructure costs.

“Cavco is excited about the combination of Commodore and Cavco,” said Steve Like, Senior Vice President for Business Development at Cavco. “This acquisition allows Cavco to expand its business into the northeastern U.S. housing markets we have not previously served. Commodore’s strong reputation for quality and service, combined with the experienced and talented workforce at its Pennsylvania manufacturing facilities provide the basis for potential future growth.”

The company received a funding proposal from the Department of Community and Economic Development (DCED) for a $220,000 Pennsylvania First grant and a $98,000 workforce development grant to help train workers. Cavco has committed to investing more than $8 million into the project.

The project was coordinated by the Governor’s Action Team, an experienced group of economic development professionals who report directly to the governor and work with businesses that are considering locating or expanding in Pennsylvania. Gov. Wolf has invested more than $16.2 billion over the past seven years to support 409 completed projects, create more than 45,500 new jobs, and retain more than 140,300 jobs for Pennsylvanians.

Cavco Industries Inc. is one of the nation’s largest national manufactured home builders and specializes in offering consumers quality, affordable homes that can meet the needs of changing lifestyles.

For more information about the Governor’s Action Team or the Department of Community and Economic Development, visit the DCED website. ##

 

MHProNews has noted for some time that manufactured housing is capable of substantial growth, based upon current market dynamics, capital access, existing laws, and long-term housing needs.

In a sense, to those in the know, the question posed by Simply Wall Street’s headline is on its face absurd.

But ironically, perhaps the greatest risk that Cavco faces is not from debt or market volatility. But rather, the risk that Cavco – and arguably several fellow Manufactured Housing Institute (MHI) brands face – are legal and regulatory threats. More on that following some key statements and facts provided by Simply Wall Street. It should in fairness be noted that the following are free insights from that financial services information platform, which routinely tease readers into buying a membership or subscription or their paid insights.

 

Is Cavco Industries (NASDAQ:CVCO) A Risky Investment?

By Simply Wall St

Published March 29, 2022

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously said that ‘Volatility is far from synonymous with risk.’ So it seems the smart money knows that debt – which is usually involved in bankruptcies – is a very important factor, when you assess how risky a company is. As with many other companies Cavco Industries, Inc. (NASDAQ:CVCO) makes use of debt. But the real question is whether this debt is making the company risky.

What Risk Does Debt Bring?

Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. Part and parcel of capitalism is the process of ‘creative destruction’ where failed businesses are mercilessly liquidated by their bankers. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. When we think about a company’s use of debt, we first look at cash and debt together.

What Is Cavco Industries’ Net Debt?

As you can see below, Cavco Industries had US$5.50m of debt at January 2022, down from US$12.7m a year prior. However, it does have US$288.4m in cash offsetting this, leading to net cash of US$282.9m.

 

How Strong Is Cavco Industries’ Balance Sheet?

We can see from the most recent balance sheet that Cavco Industries had liabilities of US$272.8m falling due within a year, and liabilities of US$32.1m due beyond that. Offsetting this, it had US$288.4m in cash and US$64.5m in receivables that were due within 12 months. So it actually has US$48.1m more liquid assets than total liabilities.

This short term liquidity is a sign that Cavco Industries could probably pay off its debt with ease, as its balance sheet is far from stretched. Succinctly put, Cavco Industries boasts net cash, so it’s fair to say it does not have a heavy debt load!

Even more impressive was the fact that Cavco Industries grew its EBIT by 111% over twelve months. That boost will make it even easier to pay down debt going forward. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately the future profitability of the business will decide if Cavco Industries can strengthen its balance sheet over time. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.

Finally, while the tax-man may adore accounting profits, lenders only accept cold hard cash. Cavco Industries may have net cash on the balance sheet, but it is still interesting to look at how well the business converts its earnings before interest and tax (EBIT) to free cash flow, because that will influence both its need for, and its capacity to manage debt. Over the last three years, Cavco Industries recorded free cash flow worth a fulsome 93% of its EBIT, which is stronger than we’d usually expect. That puts it in a very strong position to pay down debt.

Summing up

While we empathize with investors who find debt concerning, you should keep in mind that Cavco Industries has net cash of US$282.9m, as well as more liquid assets than liabilities. The cherry on top was that in converted 93% of that EBIT to free cash flow, bringing in US$120m. So we don’t think Cavco Industries’s use of debt is risky. The balance sheet is clearly the area to focus on when you are analysing debt. However, not all investment risk resides within the balance sheet – far from it. To that end, you should be aware of the 1 warning sign we’ve spotted with Cavco Industries. ” ##

When clicking on that “warning sign”, it takes readers to this page which has the following quotes.

CVCO Stock Overview

Cavco Industries, Inc. designs, produces, and retails manufactured homes primarily in the United States.

REWARDS

• Trading at 32.2% below our estimate of its fair value
• Earnings are forecast to grow 3.77% per year
• Earnings grew by 163.6% over the past year

RISK ANALYSIS

No risks detected for CVCO from our risk checks. ##

So, whoever ‘edits’ Simply Wall Street’s content apparently missed the disconnect between the teaser for the page that stated the above and more. But to say that there are ‘no risks detected’ for Cavco is absurd, given the SEC litigation and what might flow in its wake from shareholders, consumers, other public officials, etc.

The report below aligns with the Gov. Wolf announcement of organic expansion plans.

Cavco Industries Scores Production Center, Deal Announcement Adds More HUD Code Production for CVCO, Unpacking SA Analysis on Cavco During U.S. Housing Shortage; plus MHVille Markets Updates

The notion that a top official of a publicly traded firm says during an earnings call that they are turning away business ought to be a red flag for thinking people. Yet Cavco’s Bill Boor has said just that without apparent shame.

Boor’s comments and what follows from the SEC and related are arguably tied to growth efforts connected to mergers and acquisitions (M&A), a.k.a. consolidation. Why hasn’t Cavco’s management been more pragmatically focused on organic growth, as Legacy Housing – for instance – has been? But instead of organic growth, Cavco has pressed industry consolidation, as have some other MHI dominating brands.

 

 

The revelations from the SEC pleadings, see the report above, read like elements from a fictional novel or movie script. The risk isn’t from debt or market swings, but rather from the apparent thinking and behavior that leads a company’s corporate behavior in stunningly aberrant ways. Former MHI and former Cavco chair Joe Stegmayer has already cut a deal with the SEC, per their statements. Stegmayer stepped down from Cavco’s leadership, but never stepped down from his role at MHI. It is too odd to make such facts up.

Per Yahoo’s analysis in the graphic above, Cavco has short, medium, and long-term downward pressures. Yet, they say that CVCO is undervalued? Objectively, it need not be so convoluted or contradictory. What appears to be missing is the will among Cavco’s executives to press for the enforcement of existing laws that would open the door to potentially historic level of organic growth by Cavco and other firms too. Perhaps Cavco’s leadership should come clean with their shareholders and public officials such as the SEC in some deal that reveals the scandals and apparent backroom deals that have been occurring in manufactured housing. Look at the SEC pleadings to see how some of those backroom deals apparently have operated.

NOTICE: stay tuned for a report related on the topic linked below.

U.S. Senate Banking Testimony -‘How Private Equity Landlords are Changing the Housing Market’– Private Equity Stakeholder Project Hits News–More MHC Development Wanted; plus MHVille Markets

 

Next up is our daily business news recap of yesterday evening’s market report, related left-right headlines, and manufactured housing connected equities.

The Business Daily Manufactured Home Industry Connected Stock Market Updates.  Plus, Market Moving Left leaning CNN and Right-leaning (Newsmax) Headlines Snapshot. While the layout of this daily business report has been evolving over time, several elements of the basic concepts used previously are still the same. For instance. The headlines that follow below can be reviewed at a glance to save time while providing insights across the left-right media divide. Additionally, those headlines often provide clues as to possible ‘market-moving’ news items.

 

Market Indicator Closing Summaries – Yahoo Finance Closing Tickers on MHProNews…

Headlines from left-of-center CNN Business – from the evening of 3.29.2022

• Panic subsides
• NEW YORK, NEW YORK – MARCH 16: Traders work on the floor of the New York Stock Exchange (NYSE) as Ukrainian President Volodymyr Zelenskyy is shown addressing Congress on March 16, 2022 in New York City. The Dow started off the day in positive territory, extending yesterday’s rally.
• What Apple’s surging shares say about the stock market and the uncertainty surrounding Ukraine
• Will Russia use its gas to ‘blackmail’ Europe? We’re about to find out
• US oil sinks below $100 as Russia says it will ‘drastically reduce’ Kyiv assault
• Home prices rose 19.2% in January from last year
• SPACs are no longer the ‘it’ investment
• Analysis: Starbucks needs a better leadership plan than Howard Schultz
• Why high inflation can become a self-fulfilling prophecy
• Barclays hit by $590 million US market blunder and stake sale
• Radiation exposure drug maker says it is ramping up supply in Europe
• CNN+ is here: What to expect from the subscription news streamer
• How Europe’s bold new rules for Big Tech could change the services you use
• Is a recession coming? Alan Greenspan says the answer is in men’s underwear
• Prenuptial agreements aren’t just for the rich. Here’s what you should know
• Opinion: Web3 promises to put the internet into the hands of the people. Don’t believe the hype
• Elon Musk wants to get to Mars with this behemoth rocket
• Pedestrians walk by a “Now Hiring” sign outside a store on August 16, 2021 in Arlington, Virginia.
• The great resignation continues: 4.4 million Americans quit their jobs last month
• Will Smith (R) hits Chris Rock as Rock spoke on stage during the 94th Academy Awards in Hollywood, Los Angeles, California, U.S., March 27, 2022.
• How an Oscars photographer captured the moment Will Smith slapped Chris Rock
• Alcohol made from cheese waste could help fix dairy’s whey problem
• RUSSIAN MEDIA
• These Russian journalists found a way to report from outside
• More Russian media outlets close as Moscow cracks down
• What state TV says about the destruction of Mariupol
• Pro-Putin tabloid scrubs casualty figure
• Russian journalist Oksana Baulina killed in Kyiv
• SPACE TOURISM
• A Blue Origin New Shepard rocket launches on December 11, 2021, in West Texas near Van Horn.
• Here’s who’s flying on Thursday’s Blue Origin space launch
• Elon Musk wants to get to Mars with this rocket
• Virgin Galactic reopens space tourism ticket sales
• A billionaire CEO is on track to travel far into space
• Space trips won’t be affordable any time soon

Headlines from right-of-center Newsmax – evening of 3.29.2022

• Biden Is Skeptical Russia Is Scaling Back Operations in Kyiv
• President Biden at the White House on Tuesday. (AP)
• Russian Invasion of Ukraine
• Stocks Rise on Wall Street as Talks on Ukraine Progress
• Russia Moves Small Number of Troops Away From Kyiv: Pentagon
• Putin on Zelenskyy Peace Conditions: ‘Tell Him I’ll Thrash Him’
• Russia Says It Will Cut Back Operations Near Ukraine Capital
• Russia Drops ‘Denazification’ in Negotiations
• Ukraine, Russia Delegations Meet in Istanbul for Peace Talks
• Russia Expels 10 Diplomats From Baltic Nations
• US, Allies Seek ‘Strategic Failure’ for Putin in Ukraine: Envoy
• Kremlin: No Big ‘Breakthroughs’ on Ukraine Peace Talks
• UK Intel: Russia’s Wagner Group Sent to E. Ukraine
• GOP: ‘Bigger Mess’ With Biden Regime Change Quip | video
• Sens Aim to Repurpose Seized Russia Assets as Ukraine Aid
• Irpin Mayor: Ukraine Retakes Captured City
• More Russian Invasion of Ukraine
• Newsmax TV
• Reschenthaler: Biden’s Putin Comments Give Kremlin ‘Ammunition’ | video
• Van Susteren to Newsmax: Ukrainians ‘Determined to Fight’ | video
• Ukraine Official Ohryzko: No ‘Trust’ Possible With Russia | video
• Arrington: Biden’s Right, Putin ‘Should Not Be in Power’ | video
• Fmr Amb. Gilmore: Ukraine’s Loss Would Intimidate Europe | video
• Klitschko Hits Tucker Carlson, Candace Owens: ‘Blood on Your Hands’ | video
• Kremlin: Abramovich Acting as Go-Between in Ukraine Talks
• More Newsmax TV
• Newsfront
• Florida’s DeSantis Leads 21-State Suit Against Transport Mask Mandate
• Twenty-one states filed a lawsuit against the Biden administration and the Centers For Disease Control and Prevention on Tuesday, as a means of blocking the federal COVID-19 mandate requiring masks for airline travel and other modes of public transportation…. [Full Story]
• WH: No Executive Privilege for Kushner, Ivanka Trump on Jan 6 Testimony
• The White House will not assert executive privilege for testimony by [Full Story]
• FDA OKs Another Pfizer/Moderna COVID Booster for 50 & Up
• S. regulators on Tuesday authorized another COVID-19 booster for [Full Story]
• Will Smith’s Oscar Attack Reveals ‘Hypocrisy of Left, Hollywood’
• In the aftermath of “the attack heard round the world” – Will Smith’s [Full Story] | Platinum Article
• Biden Is Skeptical Russia Is Scaling Back Operations in Kyiv
• President Joe Biden on Tuesday said he wasn’t yet convinced that [Full Story]
• Gender Increasingly Blurred in Sports, Politics, Culture
• In an age where the distinctions between sexual and gender identity [Full Story] | Platinum Article
• Trump to Putin: Release Info on Hunter Biden’s Oligarch Deals
• Former President Donald Trump brought up Hunter Biden during an [Full Story]
• Thune to Vote Against Judge Jackson for SCOTUS
• John Thune, R-S.D., says he will vote against Judge Ketanji [Full Story]
• Accused Stalker of Apple CEO Tim Cook Agrees to Stay Away
• A woman accused of harassing Apple CEO Tim Cook with pleas for sex [Full Story]
• FBI: Election Officials in 9 States Targeted in Recent Cyberattacks
• Since October 2021, election officials in at least nine states have [Full Story]
• FBI Employees Broke Rules in Hundreds of Cases: Internal 2018 Audit
• An internal 2018 FBI audit obtained by The Washington Times revealed [Full Story]
• FAA Chief: Zero Tolerance for Unruly Air Passengers Should Continue
• The outgoing head of the Federal Aviation Administration (FAA) said [Full Story]
• Manchin Rips GOP for ‘Disgraceful,’ and ‘Embarrassing’ Jackson Hearings
• Joe Manchin, D-W.Va., hit out at Republicans in the Senate over [Full Story]
• DeSantis Vetoes New Florida Congressional Maps
• Ron DeSantis, R-Fla., vetoed new congressional maps Tuesday that [Full Story]
• Americans Ease up on Masks, Virus Safeguards: AP-NORC Poll
• Many Americans have taken significant steps back from once-routine [Full Story]
• GOP Bill Targets Social Media That Harbors Terrorists
• A new piece of House legislation, the No Publicity for Terrorists [Full Story]
• Jada Pinkett Smith Speaks Out After Will Smith Hits Chris Rock at Oscars
• Jada Pinkett Smith has broken her silence after her husband Will [Full Story]
• Related
• Alec Baldwin: ‘Oscars Turned Into the Jerry Springer Show’
• Chris Rock Allegedly Didn’t Know About Jada Pinkett Smith’s Condition
• Howard Stern Sees ‘Great Mental Illness’ With Will Smith
• Will Smith Apologizes to Chris Rock, Says His Behavior Was ‘Inexcusable’
• CNN Analyst Pulls Trump Into Will Smith, Chris Rock Oscars Fray
• Rubio Blasts Biden’s ‘Verbal Miscues’
• Marco Rubio, R-Fla., says President Joe Biden’s “verbal miscues” [Full Story]
• Pelosi Slams Justice Thomas and Wife
• House Speaker Nancy Pelosi, D-Calif., has joined other members of her [Full Story]
• Pentagon to Retire Dozens of Jets, Ships
• The Department of Defense plans to retire 24 ships and more than 150 [Full Story]
• AOC: Justice Thomas Must Resign or Be Impeached
• Alexandria Ocasio-Cortez, D-N.Y., calledon Supreme CourtJustice [Full Story]
• Poll: Trump Leads Biden by 6 Points in 2024 Rematch
• Former President Donald Trump leads President Joe Biden by 6 points [Full Story]
• Trump: ‘100 Percent True’ That I Hit a Hole-in-One
• Former President Donald Trump issued a statement Monday confirming it [Full Story]
• Composer Penderecki’s State Funeral Held After 2-Year Delay
• The ashes of Poland’s award-winning composer and conductor Krzysztof [Full Story]
• Blue Origin’s 4th Astro-Tourism Flight to Launch, Without Big Names
• The fourth commercial flight of Jeff Bezos’ space tourism venture [Full Story]
• Senate Judiciary Committee Delays Jackson Vote
• At the request of Senate Republicans, the Senate Judiciary Committee [Full Story]
• FDA Skeptical of Benefits From Experimental ALS Drug
• Federal health regulators issued a negative review Monday of a [Full Story]
• GOP Says Biden Made ‘Bigger Mess’ With Regime Change Quip
• President Joe Biden’s regime change quip about Russia’s Vladimir [Full Story] | video
• 6 Panel Advises Contempt for Navarro, Scavino
• The House Jan. 6 Select Committeevoted unanimously Monday to seek [Full Story]
• NC Trial Judges Again Allow More Felony Offenders to Vote
• North Carolina’s law that prohibits people convicted of felonies from [Full Story]
• Senators Seek to Repurpose Seized Russian Assets for Ukraine Aid
• Michael Bennet, D-Colo., and Rob Portman, R-Ohio, are [Full Story]
• New Military Grade Telescope Lets You See for Miles
• Starscope
• More Newsfront
• Finance
• Americans Ease up on Masks, Virus Safeguards: AP-NORC Poll
• Many Americans have taken significant steps back from once-routine coronavirus precautions – with fewer than half now saying they regularly wear face masks, avoid crowds and skip nonessential travel…. [Full Story]
• Icahn to Nominate Two Directors to Kroger Board
• Stocks Rise on Wall Street as Talks on Ukraine Progress
• FTC Sues Intuit to Stop ‘Bait-and-Switch’ TurboTax Ads
• Oil Drops $2 on Russia-Ukraine Peace Talks
• More Finance
• Health
• FDA OKs Another Pfizer/Moderna COVID Booster for 50 & Up
• S. regulators on Tuesday authorized another COVID-19 booster for people age 50 and older, a step to offer extra protection for the most vulnerable in case the coronavirus rebounds…. [Full Story]
• Common Diabetes Drug Taken by Dads Linked to Birth Defects in Babies
• Study: Steps That Improve Success of IVF
• Alopecia is No Laughing Matter
• Omicron ‘Stealth’ COVID Variant BA.2 Now Dominant Globally

MHProNews has pioneered in our profession several reporting elements that keep our regular and attentive readers as arguably the best informed in the manufactured housing industry. Among the items shared after ‘every business day’ (when markets are open) is our left-right headline recap summary. At a glance in two to three minutes, key ‘market moving’ news items are covered from left-of-center CNN Business and right-of-center Newsmax. “We Provide, You Decide.” ^© Additionally, MHProNews provides expert commentary and analysis on the issues that others can’t or won’t cover that help explain why manufactured housing has been underperforming during the Berkshire era while an affordable housing crisis and hundreds of thousands of homeless in America rages on. These are “Industry News, Tips, and Views Pros Can Use” ^© features and others made and kept us the runaway #1 in manufactured housing trade publisher for a dozen years and counting. 

 

Manufactured Housing Industry Investments Connected Equities Closing Tickers

Some of these firms invest in manufactured housing, or are otherwise connected, but may do other forms of investing or business activities too.

• • • • • • • • • • • • • • NOTE: The chart below includes the Canadian stock, ECN, which purchased Triad Financial Services, a manufactured home industry lender
                          • NOTE: Drew changed its name and trading symbol at the end of 2016 to Lippert (LCII).
                          • NOTE: Deer Valley was largely taken private, say company insiders in a message to MHProNews on 12.15.2020, but there are still some outstanding shares of  the stock from the days when it was a publicly traded firm.  Thus, there is still periodic activity on DVLY.

Manufactured Home Communities (a.k.a. ‘Mobile Home Parks’ – SIC) – Exploring UMH Properties; Fellow Manufactured Housing Institute Member Yes! Communities Suits and Settlements; plus MH Markets Updates

Clayton-21st Storm Watch – Sinatra’s Summer Wind Blows Early? – Manufactured Housing Moat Breach – Manufactured Home Values Increasing Faster than Site-Built – Case for Something New in 2022

• 

  • 2022 …Berkshire Hathaway is the parent company to Clayton Homes, 21^st Mortgage, Vanderbilt Mortgage and other factory-built housing industry suppliers.
    · LCI Industries, Patrick, UFPI, and LP each are suppliers to the manufactured housing industry, among others.
    · AMG, CG, and TAVFX have investments in manufactured housing related businesses. For insights from third-parties and clients about our publisher, click here.
    Enjoy these ‘blast from the past’ comments. MHProNews. MHProNews – previously a.k.a. MHMSM.com – has celebrated our 11th year of publishing and have completed over a dozen years of serving the industry as the runaway most-read trade media.

Sample Kudos over the years…

It is now 12+ years and counting…

Learn more about our evolutionary journey as the industry’s leading trade media, at the report linked below.

· For expert manufactured housing business development or other professional services, click here.
· To sign up in seconds for our industry leading emailed headline news updates, click here.

Disclosure. MHProNews holds no positions in the stocks in this report.

That’s a wrap on this installment of “News Through the Lens of Manufactured Homes and Factory-Built Housing” © where “We Provide, You Decide.” © (Affordable housing, manufactured homes, stock, investing, data, metrics, reports, fact-checks, analysis, and commentary. Third-party images or content are provided under fair use guidelines for media.) (See Related Reports, further below. Text/image boxes often are hot-linked to other reports that can be access by clicking on them.)

By L.A. “Tony” Kovach – for MHProNews.
Tony earned a journalism scholarship along with numerous awards in history. There have been several awards and honors and also recognition in manufactured housing. For example, he earned the prestigious Lottinville Award in history from the University of Oklahoma, where he studied history and business management. He’s a managing member and co-founder of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com. This article reflects the LLC’s and/or the writer’s position and may or may not reflect the views of sponsors or supporters.