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Skyline Champion: A Risky Way To Play Housing


  • Skyline Champion has done well to grow its business in recent years, with particularly strong growth occurring this year.
  • If growth in the market continues, the company could be a solid prospect, but it is more expensive than many of its peers.
  • Add in the downside risk if the market should slow down and it's just not a prime prospect to consider at this time.
  • Looking for a helping hand in the market? Members of Crude Value Insights get exclusive ideas and guidance to navigate any climate. Learn More »

Manufactured Home Park

Marje/E+ via Getty Images

One thing that works really well for current homeowners as well as for home construction companies is the fact that there is a significant housing shortage in the US. This helps to spur demand for housing

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This article was written by

Daniel Jones profile picture

Daniel is an avid and active professional investor.

He runs Crude Value Insights, a value-oriented newsletter aimed at analyzing the cash flows and assessing the value of companies in the oil and gas space. His primary focus is on finding businesses that are trading at a significant discount to their intrinsic value by employing a combination of Benjamin Graham's investment philosophy and a contrarian approach to the market and the securities therein. Learn more.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (2)

brettze profile picture
I had owned Skyline shares decades ago as a conservative pick. Even today, Skyline-Champion still behave as conservative home builder or modular builder that focuses solely toward leased communities as the main source of sales. Skyline-Champion still doesnt appear to be interested in building a network of contractors who develop home land packages and offer real mortgages.. Many people continues to prefer leased land communities for the lifestyle and convenience which they buy modular homes and pay space rent without owning the land.. They seem to like the clubhouse, swimming pool, higher density placements of modular homes . This is their pregrotative. Skyline-Champion just continue to stay pat without changing or branching out into the home land modular developments at all. Skyline-Champion doesnt even own leased land communities at all if any.. maybe very few to matter. They are sticking to their own knittings , pretty much. This is the reason I sold the stock as I gave up hoping that they would branch out into the modular home land package developments at least through partnerships with local real estate developers interested in it. Most of the home land developments occur welll out in the boonies where small developers install modular homes on acreage plots and sell them. This mean drilling for water, installing septic tank and hooking up to electricity and gas, etc . Internet is often non existent so they have to rely on satellite internet service like Viasat or Hughes or even Elon Musk's array of satellites .. It would be a boon for Viasat if more people want to move out into the boonies and have their internet hooked up to the geosats. Some may go alone with cellular phones without any need for PCs or laptops.
Modular home land packages is still not growing as much as I hoped for.. Many still choose to build their own houses out in the boonies instead..
Out_on_a_limb profile picture
The author doesn't know this area again. Manufactured houses are the cheapest housing one can find in terms of cost at a time of raising inflation. The risk is therefore lower than in other construction companies. Further SKY doesn't hold plots, which are the riskiest part on a balance sheet as they are the most variable part of the housing investment (cf. 2008 when recession occurs). The plot belongs to the buyer of the house.
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