Manufactured homes

[powayseller]

I would stay away from anything real estate related…

[Anonymous]

My guess – huricane season.

[anxvariety]

I would stay away from anything real estate related…

Are you saying I should sell now for +7% 😉

No seriously.. I like these stocks.. I’m not overspent and I think they have an upside that is worth the risk.

I saw an article where Jim Cramer mentioned this stock.. so it’s probably his loyal fans buying up the stock for his daily pump and dump.. in that case maybe I should get out! 🙂

[Wiley]

Yes many of todays Mhomes are being sited on foundations. That is because they can then access the mortgage back security side of finance (which fanny will purchase). And just for fyi todays Mhomes are built to HUD standards and can be legally sited anywhere a stick built house can be sited (with very few exceptions, one being cc&r’s.

Yes it is a cyclical industry coming up to it’s 7 year bear market end. The problem as I see it is the fallout from the housing market cleansing that is surely to affect us all in ways we probably can’t forsee right now. Also for the record I’m of the opinion that these cycles are created (or perhaps caused to be more pronounced) due to our system of money creation (banking system). Money is created which goes looking for yield. This creates imbalances (bubbles) which are then realized to be overvalued and a cleansing then ensues.

Regarding the question about abs and mbs I would say your exactly right. In the past the bank would approve your loan knowing it was going to hold it to maturity. As such they were fairly prudent about their loans. Some smart Wall St. guys decided to purchase all these loans, package them together and sell them off in little pieces. People (investors) assumed there was less risk since they’re only purchasing small pieces. Money then flowed in. At some point everyone realizes the risk is the same and even greater since the lending criteria was relaxed due to high demand. Money flows out.

By the way I’ve been to a few housing blogs and this one is by best in quality of posts. Actually its the first blog I’ve ever posted something on.

[anxvariety]

Wiley, you know your stuff. How did you get into the manufactured home business? I mean I think of trailer homes and I think of a guy with a trucker hat chewing on a peice of hay? 🙂 Seriously though you seem like you have a business degree of some sort.. or do you just have alot of business experience?

[Wiley]

Anxvariety, really it is a huge industry. Fleetwood is a (former) Fortune 500 company and Mhomes do represent approx 25% of single family homes in the US. Yes we do service the lower end of the market, but isn’t the big money usually made on the lower end of goods?

My real hobby is investing and learning economics but I think there are a lot of brighter minds on this board then I. Thanks for the compliment though.

[ybc]

Wiley, what explained Fleetwood’s problems other than industry wide Mhomes slump? They don’t seem to do that well in RV market either. Do you see a pick up in Mhomes once the financing side gets stablized? After all, Mhomes are affordable, and as many said, quality is much better too…

[Wiley]

Performing a Coup on founder John Creen was the start. In the late 90’s they panicked when chb began buying up some of their retailers. They went on a buying spree also where both overpaid for retailers during a time when there was four years of inventor on the ground. They basically took a debt free company and levaraged every asset as the industry imploded.

For a while the RV side was keeping them ok but I think the price of gas and product factors are really killing them now. Really sad as it was an extremely well run company.

There are only two national lenders right now and some regional banks, credit unions, etc. The lending standards are so tough on the chattel side (w/o foundaition) that it is easier for our customers to get a real estate loan with twice the payment.

I guess yes it could pick up since now is the time they should be lending (as far as being able to pick the cream of the crop in customers) but I’m very doom and gloom on the economy as a whole that I’m very biased against it.

[contraman]

Larry has hit the nail on the head my friends…it is a financing problem. I am a mortgage broker and hardly any lender will touch them.

If this changes then it may be a good play but w/o financing it is a tough sell here…

Sincerely, Contraman

[powayseller]

contraman, can you email me at [email protected]?

[anxvariety]

http://finance.yahoo.com/q?s=chb

These stocks are on the move!! 🙂

[powayseller]

Commentary:

Yes, Champion is on the move, good find anxvariety. It is because of one good contract, and I’m sure the opportunity is already priced into the stock by now:

“8/29/06: Genesis Homes, a member of the Champion family of homebuilders (NYSE:CHB – News), and the largest nationwide builder of modular homes, today announced it has been selected by NOLA to build a modular home for use in temporary housing proposals to FEMA. ”

Schahrzad Berkland

[Anonymous]

You know that saying… out with the old, in with the new?
What do you think is going on with Cavalier?

[anxvariety]

Go CHB!

I actually sold my shares.. the rise was pretty rapid and I want to see where it’s going to settle down before getting back in.

[an]

Congrats, seems like you caught it at the exact bottom or dead cat bounce point, depending on how it perform the next year or so. CHB did great in the past 3 months, but CAV was negative from August to November, then a massive 50% jump after November. If you kept both until now, you did great for the year.

[Author]

Posts