Learning the Mobile Home Business (and Finding Value Along the Way)

about 2 months ago

"At my entry point, around book value, Legacy’s valuation looked reasonable. The stock now trades at roughly 11 times earnings, 1.1 times book, and 27 times free cash flow. It’s not a screaming bargain, but if the company continues earning a mid-teens return on assets, buying near book value should produce long-term returns above the market average. The company doesn’t pay a dividend, but it has repurchased about $6.5 million in stock , which is nice but isn’t moving the needle much."

Legacy Housing is a micro cap manufacturer of mobile homes, an interesting play on the housing shortage

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