Trade-Ideas LLC identified

Cavco Industries

(

CVCO

) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Cavco Industries as such a stock due to the following factors:

  • CVCO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.1 million.
  • CVCO is making at least a new 3-day high.
  • CVCO has a PE ratio of 32.
  • CVCO is mentioned 0.39 times per day on StockTwits.
  • CVCO has not yet been mentioned on StockTwits today.
  • CVCO is currently in the upper 20% of its 1-year range.
  • CVCO is in the upper 35% of its 20-day range.
  • CVCO is in the upper 45% of its 5-day range.
  • CVCO is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on CVCO:

Cavco Industries, Inc. engages in the design, production, wholesale, and retail sale of manufactured homes in the United States. It operates through two segments, Factory-Built Housing and Financial Services. CVCO has a PE ratio of 32.

The average volume for Cavco Industries has been 46,100 shares per day over the past 30 days. Cavco has a market cap of $715.1 million and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 0.51 and a short float of 6.4% with 6.45 days to cover. Shares are up 4.4% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Cavco Industries as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, solid stock price performance and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • CVCO's revenue growth has slightly outpaced the industry average of 10.0%. Since the same quarter one year prior, revenues rose by 16.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • CVCO's debt-to-equity ratio is very low at 0.21 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.24, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 80.95% to $3.94 million when compared to the same quarter last year. In addition, CAVCO INDUSTRIES INC has also vastly surpassed the industry average cash flow growth rate of -72.49%.
  • CAVCO INDUSTRIES INC's earnings per share declined by 6.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CAVCO INDUSTRIES INC increased its bottom line by earning $2.65 versus $1.89 in the prior year. This year, the market expects an improvement in earnings ($2.90 versus $2.65).
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.

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