Cavco Industries (CVCO), mcap=$2.3bn, price $255 vs $222

– Producer of manufactured/modular homes, park model RVs, etc, at 8xEBIT.
– The wide-moat company is set to benefit from the affordability crisis and deregulation trends.
– A pristine balance sheet with a long history of profitability.
– +47% ’22 revenue growth, with +17% growth consensus for ’23.
– 34-week backlog with community REITs buying every home the company can produce.
– #3 player with 17% market share, behind Clayton Homes (owned by $BRK) with 50% share.

– Trades at 8.1x EBIT vs the 10-year median of 16x.
– Currently at a depressed valuation, but in line with industry comps on an EV/EBITDA basis.
– Industry average ten-year median EBITDA multiple at 12.5x.
– At 12.5xEBITDA, would be $308/stock.

Exp. gain: +40% to $308/share.

Full $CVCO write-up (free guest account required):

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