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].

Group 1 - The article emphasizes the focus on cash flow and the potential for value and growth in the oil and natural gas sector [1] - Crude Value Insights provides a service that includes a 50+ stock model account and in-depth cash flow analyses of exploration and production (E&P) firms [1] - Subscribers have access to live chat discussions about the sector, enhancing community engagement and information sharing [1] Group 2 - A two-week free trial is offered to new subscribers, promoting engagement with the oil and gas investment service [2]

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying the right ones can be challenging due to associated risks and volatility [1] Group 1: Company Overview - Cavco (CVCO) is highlighted as a recommended growth stock with a favorable Growth Score and a top Zacks Rank [2] - The company has a historical EPS growth rate of 20% and is projected to achieve an EPS growth of 20.7% this year, significantly outperforming the industry average of -0.8% [5] Group 2: Financial Metrics - Cavco's year-over-year cash flow growth stands at 12.2%, surpassing the industry average of 0% [6] - The company's annualized cash flow growth rate over the past 3-5 years is 19.6%, compared to the industry average of 8.7% [7] Group 3: Earnings Estimates - The Zacks Consensus Estimate for Cavco's current-year earnings has increased by 3.8% over the past month, indicating a positive trend in earnings estimate revisions [8] - Cavco has earned a Growth Score of B and holds a Zacks Rank 2 due to these positive earnings estimate revisions, positioning it well for potential outperformance [10]

Core Insights - Cavco Industries reported strong quarterly earnings, exceeding analyst estimates on both revenue and net income, which attracted investor interest [1][4] Financial Performance - Cavco generated approximately $557 million in revenue for Q2 of fiscal 2026, marking a nearly 10% increase compared to the same period in fiscal 2025 [3] - Net income rose by just under 20% year-over-year to $52.4 million, equating to $6.55 per share, surpassing analyst expectations of $543 million in revenue and $6.09 per share [3][4] Market Reaction - Following the earnings report, Cavco's stock price increased by over 5%, significantly outperforming the S&P 500 index, which only rose by 0.3% [2] Business Segments - The company experienced growth across all business segments, particularly in family-built housing, which contributed $535 million to revenue, a 10% increase [6]

Financial Performance - Net revenue for the three months ended September 27, 2025, was $556,527, an increase of 9.7% compared to $507,461 for the same period in 2024[12]. - Gross profit for the six months ended September 27, 2025, was $263,913, representing a 20.2% increase from $219,524 in the prior year[12]. - Net income for the six months ended September 27, 2025, was $104,023, up 33.0% from $78,244 for the same period in 2024[12]. - Home sales revenue for the three months ended September 27, 2025, was $509,750, a 8.5% increase from $469,676 in the same period of 2024[23]. - The company’s comprehensive income for the six months ended September 27, 2025, was $104,233, compared to $78,501 for the same period in 2024, marking a 32.8% increase[12]. - Net income for the three months ended September 27, 2025, was $52,381,000, compared to $43,815,000 for the same period in 2024, representing a 19% increase[51]. - The company’s total net revenue for the six months ended September 27, 2025, was $1,113,384,000, compared to $985,060,000 for the same period in 2024, reflecting a 13% increase[55]. Cash Flow and Liquidity - Cash provided by operating activities for the six months ended September 27, 2025, was $133,994, compared to $102,074 in the prior year, reflecting a 31.1% increase[14]. - The company reported a net cash increase of $24,609 for the six months ended September 27, 2025, compared to an increase of $17,464 in the same period of 2024[14]. - The company’s cash, cash equivalents, and restricted cash at the end of the period were $399,954, compared to $386,217 at the end of the same period in 2024[14]. - Cash, cash equivalents, and restricted cash at the end of the period increased by $13,737,000 to $399,954,000 as of September 27, 2025, from $386,217,000 in the prior year[88]. Expenses and Profitability - Selling, general and administrative expenses for the three months ended September 27, 2025, were $72,229, up 7.4% from $66,997 in the same period of 2024[12]. - Gross profit for the three months ended September 27, 2025, increased by 15.7% to $134,407,000 compared to $116,122,000 for the same period in 2024[79]. - Financial services gross profit surged by 158.9% to $11,914,000 for the three months ended September 27, 2025, driven by higher insurance premiums and lower claim losses[80]. Assets and Investments - The company’s total assets as of September 27, 2025, were estimated at $1,041,977,000, reflecting an increase from $1,033,411,000 as of June 29, 2024[50]. - Total consolidated assets as of September 27, 2025, were $1,449,069,000, an increase from $1,406,645,000 on March 29, 2025[58]. - Investments increased from $37,909 thousand in March 2025 to $41,206 thousand in September 2025, representing an increase of 8.0%[25]. - The fair value of available-for-sale debt securities rose from $21,415 thousand in March 2025 to $23,197 thousand in September 2025, an increase of 8.3%[25]. Loans and Financing - Consumer loans receivable decreased from $58,162 thousand in March 2025 to $54,428 thousand in September 2025, a decline of 6.3%[28]. - Commercial loans receivable increased from $100,297 thousand in March 2025 to $108,038 thousand in September 2025, an increase of 7.3%[30]. - The weighted average contractual interest rate for consumer loans held for investment was 7.8% in September 2025, slightly down from 7.9% in March 2025[28]. - The company had outstanding interest rate lock commitments with a notional amount of $25.2 million as of September 27, 2025, up from $16.3 million as of March 29, 2025[46]. Stock and Equity - The total stockholders' equity increased to $1,086,137 thousand as of September 27, 2025, from $1,064,582 thousand as of March 29, 2025[49]. - The stock repurchase plan announced on October 31, 2024, approved $100 million in stock repurchases, with no remaining balance as of September 27, 2025[100]. - The stock repurchase plan announced on May 22, 2025, approved $150 million in stock repurchases, with $142 million remaining as of September 27, 2025[100]. - During the second quarter of fiscal year 2026, a total of 67,070 shares were repurchased, with an average price paid per share of $549.73[99]. Market and Operational Insights - The factory-built housing segment generated net revenue of $535,117,000 for the three months ended September 27, 2025, up from $486,343,000 in the same period of 2024, reflecting a 10% growth[55]. - The number of factory-built homes sold by company-owned retail sales centers increased by 15.0% to 1,187 homes for the three months ended September 27, 2025[76]. - The backlog of orders as of September 27, 2025, was $210 million, up from $197 million at March 29, 2025, but down from $276 million at September 28, 2024[73]. - The average net revenue per factory-built home sold increased by 4.4% to $103,344 for the three months ended September 27, 2025[76]. - The company operates 31 homebuilding production lines across various states and two international lines in Mexico[65]. - The company is focused on building energy-efficient homes and exploring niche market opportunities to enhance competitiveness[68]. Strategic Acquisitions - The company completed the acquisition of American Homestar Corporation for $190 million, enhancing its manufacturing and retail presence in the South Central U.S.[59]. - The company plans to acquire American Homestar and continue evaluating potential acquisitions and strategic investments[86].

Financial Data and Key Metrics Changes - Revenue increased by 9.7% year-over-year to $556.5 million, with a slight sequential decrease of $0.3 million [11] - Operating profit rose by approximately 27% compared to last year's Q2 and up 3% sequentially [4] - Net income was $52.4 million, compared to $43.8 million in the same quarter of the prior year, with diluted earnings per share increasing to $6.55 from $5.28 [15][14] Business Line Data and Key Metrics Changes - Factory-built housing segment net revenue was $535.1 million, up 10% year-over-year, driven by a 5.4% increase in homes sold and a 4.4% increase in average revenue per home sold [11] - Financial services segment net revenue increased by 1.4% to $21.4 million, with operating profit rising from a loss to an $8 million profit [12][8] Market Data and Key Metrics Changes - National shipments in the industry were up over 3% year-to-date through August, with notable double-digit growth in many northern U.S. regions [4] - The Southeast region experienced a decline in shipments, down about 4% year-to-date and 10% in July and August compared to last year [5] Company Strategy and Development Direction - The company is focused on capital allocation, including investments in existing plants, acquisitions, and share repurchases, with $36 million of common shares repurchased [10][15] - The integration of the American HomeStar acquisition is progressing well, with expectations of adding value over the coming quarters [9][44] Management's Comments on Operating Environment and Future Outlook - Management noted significant regional differences in market performance, with a balanced market overall despite challenges in the Southeast [8][26] - The company is monitoring production closely and adjusting as necessary, indicating a cautious but optimistic outlook for the upcoming quarters [8][26] Other Important Information - The effective income tax rate increased to 22.1% due to a reduction in expected tax credits [14] - The company reported a cash balance of $400 million, with cash provided by operating activities at $78.5 million [16] Q&A Session Summary Question: How are orders trending into fiscal Q3? - Management indicated that wholesale orders were slightly down in the quarter, but backlog has stabilized and grown a little [24][26] Question: What is the current state of the Texas market? - The Texas market is performing well, with strong retail results contributing positively to production [32] Question: What are the expectations for gross margins in the next quarters? - Management acknowledged input cost pressures but emphasized the strength of their business model in managing costs [33][35] Question: How is the American HomeStar acquisition performing? - The integration is going well, and the acquired company is expected to contribute positively to the overall business [44][46] Question: What is the impact of tariffs on costs? - Tariffs have added approximately $2 million in costs for Q2, with potential increases due to recent tariff changes on Canadian lumber [35][92] Question: How does the company maintain pricing in the Southeast? - Management stated that pricing has remained stable despite lower order rates, indicating a healthy market environment [95]

Core Insights - Cavco (CVCO) reported quarterly earnings of $6.55 per share, exceeding the Zacks Consensus Estimate of $6.3 per share, and up from $5.28 per share a year ago, representing an earnings surprise of +3.97% [1] - The company achieved revenues of $556.53 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.82% and increasing from $507.46 million year-over-year [2] - Cavco has consistently surpassed consensus EPS estimates over the last four quarters, achieving this four times [2] Earnings Outlook - The sustainability of Cavco's stock price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3] - The current consensus EPS estimate for the upcoming quarter is $5.95 on revenues of $542.9 million, while for the current fiscal year, it is $25.16 on revenues of $2.22 billion [7] Industry Context - The Building Products - Mobile Homes and RV Builders industry, to which Cavco belongs, is currently ranked in the bottom 30% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Cavco's stock performance [5]

Financial Performance - Net revenue for Q2 2026 was $556.5 million, an increase of $49 million or 9.7% compared to $507.5 million in Q2 2025, driven by home sales volume and average selling price growth[6]. - Income before income taxes rose to $67 million, up $12 million or 22.4% compared to $55 million in the same period last year[6]. - Net income per diluted share attributable to common stockholders was $6.55, reflecting a 24% increase from $5.28 in the prior year quarter[6]. - Net revenue for the three months ended September 27, 2025, was $556.5 million, an increase of 9.7% compared to $507.5 million for the same period in 2024[19]. - Net income for the three months ended September 27, 2025, was $52.4 million, representing a 19.4% increase from $43.8 million in the same quarter of 2024[19]. - Basic net income per share for the six months ended September 27, 2025, was $13.12, compared to $9.48 for the same period in 2024, reflecting a 38.0% increase[19]. - The company reported a 26.6% increase in income from operations for the three months ended September 27, 2025, totaling $62.2 million compared to $49.1 million in the prior year[19]. Sales and Production - Home sales volume increased by 5.4%, with factory capacity utilization rising to approximately 75% from 70% in the prior year[6]. - Backlogs at the end of the quarter totaled $210 million, representing 5-7 weeks of production[6]. Profitability - Gross profit margin for factory-built housing remained flat at 22.9%, while financial services gross profit margin surged to 55.6% from 21.8% in the prior year[6]. - Gross profit for the six months ended September 27, 2025, reached $263.9 million, up 20.2% from $219.5 million in the prior year[19]. Financial Services - The financial services segment's net revenue increased due to higher insurance premiums, contributing to a gross profit increase of 158.9%[8][11]. Capital and Investments - Capital expenditures for the three months ended September 27, 2025, were $9.9 million, significantly higher than $4.9 million in the same period of 2024[21]. Corporate Developments - The company successfully closed the acquisition of American Homestar Corporation, enhancing operational success and integration efforts[5]. - Lisa Daniels was appointed to the Board of Directors, bringing valuable experience to the company[6]. Assets and Liabilities - Total assets as of September 27, 2025, amounted to $1.449 billion, an increase from $1.407 billion as of March 29, 2025[17]. - Total liabilities increased to $362.9 million as of September 27, 2025, compared to $342.1 million as of March 29, 2025[17]. - The current portion of consumer loans receivable, net, was $33.5 million as of September 27, 2025, down from $35.9 million as of March 29, 2025[17]. Outlook - The company’s outlook remains positive, with expectations for continued growth in the manufactured housing business despite potential risks and uncertainties[15]. Stock Activity - Stock repurchases amounted to approximately $36 million during the quarter, with $142 million remaining available under the Board's authorization[6].