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    Thursday, February 12, 2004

    Since first mentioning Cavco it's been pretty much straight up. This pick came as a result of reading a fantastic book on special situation investing (mentioned in the link). A quick review of my calls on them is interesting;

    1. With no improvement in the manufactured housing market worth $21-$28
    2. With a 5% growth rate they would be worth $31
    3. I then complained a little about the executive compensation but recognized that it ought to be a powerful motivator
    4. Cavco was listed and traded higher than I had hoped for.
    5. Berkshire Hathaway was trying to purchase Clayton Homes, another manufactured housing company. This, along with the research posted by opponents of the sale, was a great indication that the industry was at a cyclical low.
    6. I discussed how important it was that US Bancorp was entering the Manufactured Home loan market was very bullish.
    5. Mentioned it when it was at $18.15

    Well Cavco traded above $40 today on news that Fannie May would offer 30 year mortgages for manufactured homes with deposits as low as 5%.

    Well I did all of the right things here except actually buying CVCO! It never quite got cheap enough for my "random" target so I never bought any. Three spin offs that I watched, Car Max, Cavco and ABX Air all shot up significantly from the prices they traded at when-issued (there is trading on upcoming spin-offs before they are actually available).

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    Disclaimer and Disclosure Analyses are prepared from sources and data believed to be reliable, but no representation is made as to their accuracy or completeness. I am not paid by covered companies. Strategies or ideas are presented for informational purposes and should not be used as a basis for any financial decisions.
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