Core Insights - The individual has retired after over 43 years in investment research, now operating independently to provide actionable investment insights [1] - The focus is on rules/factor-based equity investing strategies, emphasizing the use of numbers to inspire human intelligence-driven investment stories rather than serving the numbers themselves [1] - The approach combines factor analysis with classic fundamental analysis to uncover the true story of a company and its stock, highlighting the importance of future potential over past data [1] Investment Experience - The individual has extensive experience covering a wide range of stocks, including large cap, small cap, micro cap, value, growth, and income [1] - Previous roles included managing a high-yield fixed-income fund and conducting research on quantitative asset allocation strategies, which are foundational to modern Robo Advising [1] - The individual has edited and written stock newsletters, notably the Forbes Low Priced Stock Report, and served as an assistant research director at Value Line [1] Educational Contributions - There is a strong passion for investor education, demonstrated through numerous seminars on stock selection and analysis [1] - The individual is the author of two books: "Screening The Market" and "The Value Connection," further contributing to investor education [1]

Financial Data and Key Metrics Changes - Net revenue for Q3 FY2026 was $581 million, an increase of $59 million or 11.3% from $522 million in the prior year quarter [16] - Consolidated gross margin as a percentage of net revenue decreased to 23.4% from 24.9% in the same period last year [18] - Net income was $44.1 million, down from $56.5 million in the same quarter of the prior year, with diluted earnings per share at $5.58 compared to $6.90 [20] Business Line Data and Key Metrics Changes - Factory-built housing segment net revenue was $558.5 million, up 11.5% from $500.9 million in the prior year quarter, primarily due to the addition of American Homestar [16] - Financial services segment net revenue increased to $22.5 million, up 6.2% from $21.2 million in the prior year quarter [17] - Gross profit in the factory-built housing segment was 21.7%, down from 23.6% in the prior year quarter due to higher per unit costs [18] Market Data and Key Metrics Changes - Industry shipments slowed in October and November, down 13% from the calendar 2024 period, with Cavco's volume down about 4% compared to last year [6][9] - The Southeast region saw higher volume in Q3 versus Q2, while most other regions experienced declining shipments [8] - Average selling price grew sequentially despite the volume drop-off, indicating underlying demand [9] Company Strategy and Development Direction - The company is focused on integrating American Homestar and realizing synergies, with an estimated annual synergy of over $10 million, half of which has been achieved [12][14] - Continued share repurchases during the quarter, with $44 million used to buy back company stock, reflecting a commitment to return capital to shareholders [15] - The company is enhancing its digital marketing infrastructure and rebranding efforts to improve market presence and customer engagement [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the spring selling season, citing healthy leading indicators such as quotes and retail traffic [10] - The company is monitoring the impact of weather on operations but remains confident in maintaining production rates and backlogs [33][81] - Discussions around affordable housing policies are seen as supportive for factory-built housing, especially with upcoming elections [10] Other Important Information - SG&A expenses increased to $81.4 million, or 14% of net revenue, primarily due to the addition of American Homestar and higher compensation costs [18][19] - Interest income decreased to $3 million from $5.4 million in the prior year quarter due to lower cash balances after the acquisition [19] Q&A Session Summary Question: What caused the lower utilization and production adjustments? - Management noted a significant industry downturn in October and November, but the Southeast region performed well, and production rates were maintained to prepare for potential increases in the spring [28][30] Question: What is the outlook for gross margins and cost impacts? - Management indicated that gross margins were affected by higher input costs, but no significant impact from acquisition accounting was noted [37][64] Question: How are community sales performing compared to retail? - Community sales showed relative weakness, but management did not perceive this as a long-term trend, noting that communities remain optimistic about future sales [52][55] Question: What are the expectations for synergies from the American Homestar acquisition? - Management expects to realize $10 million in annual synergies, with approximately half already achieved, focusing on purchasing and labor savings [99] Question: How is the company positioned for the upcoming spring selling season? - Management expressed confidence in maintaining production rates and backlogs, with positive indicators from recent industry events and customer discussions [88][90]

Financial Data and Key Metrics Changes - Net revenue for Q3 FY2026 was $581 million, an increase of $59 million or 11.3% from $522 million in the prior year quarter [16] - Consolidated gross margin as a percentage of net revenue decreased to 23.4% from 24.9% in the same period last year [18] - Net income was $44.1 million, down from $56.5 million in the same quarter of the prior year, with diluted earnings per share at $5.58 compared to $6.90 [20] Business Line Data and Key Metrics Changes - Factory-built housing segment net revenue was $558.5 million, up 11.5% from $500.9 million in the prior year quarter, primarily due to the addition of American Homestar [16] - Financial services segment net revenue increased to $22.5 million, up 6.2% from $21.2 million in the prior year quarter, driven by higher insurance premium rates [17] Market Data and Key Metrics Changes - Industry shipments slowed in October and November, down 13% from the calendar 2024 period, with Cavco's volume down about 4% compared to last year [6][8] - The Southeast region saw higher volume in Q3 versus Q2, while most other regions experienced declining shipments [8] Company Strategy and Development Direction - The company is focused on integrating American Homestar, with estimated annual synergies above $10 million, half of which has been achieved [12][14] - The company continues to enhance its digital marketing infrastructure and rebranding efforts to improve market presence and customer engagement [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the spring selling season, citing healthy leading indicators such as quotes and retail traffic [10][86] - The company noted that while there is uncertainty in the market, the tone from operations and market feedback remains positive [10] Other Important Information - The company repurchased $44 million of common shares during the quarter, maintaining a healthy unrestricted cash balance of $225 million [15][20] - SG&A expenses increased due to the addition of American Homestar and higher compensation costs, expected to decline as synergies are realized [19] Q&A Session Summary Question: What caused the lower utilization and production adjustments? - Management noted that the industry experienced a significant downtick in October and November, with the Southeast region performing better than others [28][30] Question: How is the gross margin impacted by acquisition accounting? - Management clarified that there was no impact on gross margins from the acquisition, with year-over-year declines attributed to increases in input costs [38][65] Question: What are the updated synergy targets from the American Homestar acquisition? - Management indicated that the annualized synergy target is $10 million, with approximately half already actioned, expected to contribute positively in Q4 [95][96]

Financial Data and Key Metrics Changes - Net revenue for Q3 2026 was $581 million, an increase of $59 million or 11.3% from $522 million in the prior year quarter [15] - Consolidated gross margin as a percentage of net revenue decreased to 23.4% from 24.9% in the same period last year [16] - Net income was $44.1 million, down from $56.5 million in the same quarter of the prior year, with diluted earnings per share at $5.58 compared to $6.90 [19] Business Line Data and Key Metrics Changes - Factory-built housing segment net revenue was $558.5 million, up 11.5% from $500.9 million in the prior year quarter, primarily due to the addition of American Homestar [15] - Financial services segment net revenue increased to $22.5 million, up 6.2% from $21.2 million in the prior year quarter, driven by higher insurance premium rates [16] - Gross profit in the factory-built housing segment decreased to 21.7% from 23.6% in the prior year quarter due to higher per unit costs [17] Market Data and Key Metrics Changes - Industry shipments slowed in October and November, down 13% from the calendar 2024 period, with Cavco's volume down about 4% compared to last year [5] - The Southeast region stabilized and saw higher volume in Q3 versus Q2, while most other regions experienced declining shipments [8] - Average selling price grew sequentially despite the volume drop-off, with single-section home prices roughly flat and multi-section pricing up [9] Company Strategy and Development Direction - The company is focused on integrating American Homestar, with estimated annual synergies above $10 million, half of which has been achieved [12] - Continued share repurchases during the quarter amounted to $44 million, with a healthy unrestricted cash balance of $225 million at the end of Q3 [14] - The company is optimistic about the spring selling season, with healthy leading indicators such as quotes and retail traffic [10] Management's Comments on Operating Environment and Future Outlook - Management noted that the tone in operations and the market is optimistic, with discussions around affordable housing gaining traction [10] - The company is maintaining production rates and staffing levels to be well-positioned for potential increases in demand during the spring [28] - Management acknowledged challenges due to weather impacting operations but expressed confidence in the stability of backlogs [82] Other Important Information - SG&A expenses increased to $81.4 million, or 14% of net revenue, primarily due to the addition of American Homestar and higher compensation costs [17] - Interest income decreased to $3 million from $5.4 million in the prior year quarter due to lower cash balances after the acquisition [18] Q&A Session Summary Question: What caused the lower utilization and how should production be viewed for Q4? - Management indicated that the industry experienced a significant downtick in October and November, but production rates were maintained to prepare for potential increases in the spring [28][30] Question: Can you elaborate on gross margin impacts and acquisition accounting? - Management clarified that there was no impact on gross margins from the acquisition, with year-over-year declines attributed to increases in input costs [38][65] Question: What are the updated synergy targets from the American Homestar acquisition? - Management stated that annualized synergies are expected to reach $10 million, with approximately half already realized [99]

Revenue Performance - Net revenue for the third fiscal quarter was $581.0 million, an increase of $59 million or 11.3% compared to $522.0 million in the same quarter of the previous year[8]. - Net revenue for the three months ended December 27, 2025, was $580,994,000, an increase of 11.2% compared to $522,040,000 for the same period in 2024[21]. Profitability - Gross profit as a percentage of net revenue for factory-built housing was 21.7%, down from 23.6% in the same period last year[8]. - Financial services gross profit as a percentage of net revenue was 65.2%, up from 55.5% in the same period last year[8]. - Gross profit for the three months ended December 27, 2025, was $135,921,000, representing a gross margin of 23.4%, compared to $129,950,000 and a gross margin of 24.9% for the same period in 2024[21]. - Income before income taxes was $58 million, a decrease of $11 million or 16.9% compared to $69 million in the same period last year[8]. - Net income for the three months ended December 27, 2025, was $44,067,000, a decrease of 22% from $56,462,000 in the same period in 2024[21]. - Net income per diluted share attributable to common stockholders was $5.58, down 19.1% from $6.90 in the prior year quarter[8]. - Basic net income per share for the three months ended December 27, 2025, was $5.65, down from $6.97 for the same period in 2024[21]. Sales and Backlogs - Home sales volume increased by 3.2%, while capacity utilization decreased to approximately 70% from 75% in the same quarter of the prior year[8]. - Backlogs totaled $160 million at the end of the quarter, representing 4-6 weeks of production[8]. - American Homestar contributed $42 million to net revenue with 343 homes sold, alongside $6.9 million in incremental SG&A expenses[8]. Financial Position - Total assets increased to $1,472,195,000 as of December 27, 2025, compared to $1,406,645,000 as of March 29, 2025[19]. - Total liabilities rose to $382,976,000 as of December 27, 2025, up from $342,063,000 as of March 29, 2025[19]. - Cash and cash equivalents decreased to $224,616,000 as of December 27, 2025, from $356,225,000 as of March 29, 2025[19]. - Capital expenditures for the nine months ended December 27, 2025, were $27,360,000, compared to $15,253,000 for the same period in 2024[23]. Stock and Shareholder Returns - Stock repurchases amounted to approximately $44 million in the quarter, with about $98 million remaining for future repurchases[8]. - The company reported a total of 7,801,698 basic weighted average shares outstanding for the three months ended December 27, 2025[21]. Financial Services - The financial services segment showed strong results, reflecting improved profitability in the insurance operation[9]. - The company’s finance subsidiary, CountryPlace Mortgage, continues to offer conforming and non-conforming mortgages, contributing to its overall financial performance[16].

Core Viewpoint - Cavco Industries, Inc. reported financial results for the third fiscal quarter ended December 27, 2025, highlighting a significant acquisition and mixed performance in various segments [1][4]. Acquisition Details - On September 29, 2025, Cavco completed the acquisition of American Homestar Corporation, which includes two manufacturing lines, nineteen retail locations, and a financial services operation. The results of American Homestar are now included in Cavco's consolidated financial statements [2]. Quarterly Highlights - Industry shipments slowed during the quarter, particularly in HUD shipments, prompting Cavco to maintain production through backlog management and holiday downtime. The market sentiment remains optimistic regarding affordable housing [4]. - The financial services segment showed strong results, with improved profitability in the insurance operation. The first full quarter with American Homestar reflected deal costs and integration expenses, but future benefits from the acquisition are anticipated to exceed expectations [4]. Financial Results - Net revenue for the quarter was $581.0 million, an increase of $59 million or 11.3% compared to $522.0 million in the same quarter of the previous year, driven by home sales volume and average selling price growth [6]. - Factory-built housing revenue was $558.5 million, up 11.5% from $500.9 million, while financial services revenue increased by 6.2% to $22.5 million [5][6]. - Gross profit as a percentage of net revenue for factory-built housing decreased to 21.7% from 23.6% year-over-year, while financial services gross profit increased to 65.2% from 55.5% [6][8]. Operational Metrics - Factory-built modules sold increased by 5.3% to 8,818 units, with a net revenue per home sold rising by 8.0% to $106,971 [5][7]. - Backlogs totaled $160 million at the end of the quarter, representing 4-6 weeks of production [6]. Income and Expenses - Income before income taxes was $58 million, down 16.9% from $69 million in the prior year, with net income per diluted share at $5.58, a decrease of 19.1% from $6.90 [6][10]. - Selling, general, and administrative expenses increased by 23.3% to $81.4 million, primarily due to the addition of American Homestar and associated deal costs [8][11]. Long-term Outlook - The company anticipates that the integration of American Homestar will yield positive impacts as the investment phase concludes, with expectations for increased production in the upcoming Spring selling season [4].

Core Viewpoint - Cavco Industries, Inc. is set to release its third-quarter earnings for the period ending December 27, 2025, on January 29, 2026, with a live discussion scheduled for January 30, 2026 [1]. Company Overview - Cavco Industries, Inc. is headquartered in Phoenix, Arizona, and specializes in designing and producing factory-built housing products, primarily distributed through a network of independent and company-owned retailers [3]. - The company is recognized as one of the largest producers of manufactured and modular homes in the United States, based on reported wholesale shipments [3]. - Cavco also produces park model RVs, vacation cabins, and factory-built commercial structures [3]. - The finance subsidiary, CountryPlace Mortgage, is an approved seller/servicer for Fannie Mae and Freddie Mac, and a Ginnie Mae mortgage-backed securities issuer, offering various mortgage products [3]. - The insurance subsidiary, Standard Casualty, provides property and casualty insurance to owners of manufactured homes [3].

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Cavco (CVCO) - Cavco currently holds a Momentum Style Score of B, indicating a favorable position in momentum investing [3] - The company has a Zacks Rank of 2 (Buy), suggesting strong potential for outperformance in the market [4] Performance Metrics - Over the past week, Cavco shares increased by 3.88%, while the Zacks Building Products - Mobile Homes and RV Builders industry rose by 4.08% [6] - In a longer timeframe, Cavco's monthly price change is 10.27%, outperforming the industry's 7.17% [6] - Over the last three months, Cavco shares have risen by 8.04%, and by 14.37% over the past year, compared to the S&P 500's increases of 6.75% and 14.16%, respectively [7] Trading Volume - Cavco's average 20-day trading volume is 115,680 shares, which serves as a baseline for price-to-volume analysis [8] Earnings Outlook - In the past two months, one earnings estimate for Cavco has increased, while none have decreased, raising the consensus estimate from $25.16 to $26.11 [10] - For the next fiscal year, one estimate has moved upwards with no downward revisions during the same period [10] Conclusion - Given the positive performance metrics and earnings outlook, Cavco is positioned as a 2 (Buy) stock with a Momentum Score of B, making it a strong candidate for near-term investment [12]

Core Insights - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] - The Zacks Momentum Style Score helps investors identify stocks with strong momentum, addressing the challenges of defining momentum [2] Company Overview: Cavco (CVCO) - Cavco currently holds a Momentum Style Score of B and a Zacks Rank of 2 (Buy), indicating a favorable outlook for the stock [3][4] - Over the past week, CVCO shares increased by 8.8%, outperforming the Zacks Building Products - Mobile Homes and RV Builders industry, which rose by 0.71% [6] - In the last quarter, CVCO shares rose by 12.91%, and over the past year, they increased by 18.34%, while the S&P 500 only moved 4.53% and 13.83%, respectively [7] Trading Volume and Market Activity - The average 20-day trading volume for CVCO is 141,035 shares, which serves as a baseline for price-to-volume analysis [8] - A rising stock with above-average volume is generally considered bullish, while a declining stock with above-average volume is typically bearish [8] Earnings Outlook - Recent earnings estimate revisions for CVCO show one upward revision for the full year, increasing the consensus estimate from $25.16 to $26.11 over the past 60 days [10] - For the next fiscal year, one estimate has moved upwards with no downward revisions, indicating a positive earnings outlook [10] Conclusion - Considering the positive momentum indicators and earnings outlook, CVCO is positioned as a 2 (Buy) stock with a Momentum Score of B, making it a potential candidate for investors seeking short-term gains [12]

Core Insights - The article highlights the author's qualifications and experience in equity research and investment analysis, emphasizing a strong focus on the U.S. equity market, particularly in the consumer staples sector, which is viewed as offering resilient long-term investment opportunities [1]. Group 1: Qualifications and Experience - The author is a certified FMVA and FPWMP, equipped with skills to analyze financial statements and build valuation models [1]. - Participation in the CFA Research Challenge provided practical experience in equity analysis and industry research [1]. - The author holds a degree in Finance from Alexandria University, graduating in 2024 with a CGPA of 3.6 [1]. Group 2: Analytical Focus - The analytical focus is on the U.S. equity market, with a particular interest in defensive stocks within the consumer staples sector [1]. - Experience includes preparing investment reports across various sectors such as healthcare, consumer staples, and industrials, enhancing the ability to evaluate companies across diverse industries [1]. Group 3: Professional Development - In 2023, the author joined AIESEC, which helped develop leadership, communication, and teamwork skills through global exchange and project collaboration [1].