Don't Miss Today's Strong And Under The Radar Stock: Cavco Industries (CVCO)

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 $7.9 million.
  • CVCO has traded 14 options contracts today.
  • CVCO is making at least a new 3-day high.
  • CVCO has a PE ratio of 32.
  • CVCO is mentioned 0.87 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, 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 113,100 shares per day over the past 30 days. Cavco has a market cap of $893.5 million and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.67 and a short float of 3.6% with 3.59 days to cover. Shares are up 18.5% 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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, solid stock price performance and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 3.7%. Since the same quarter one year prior, revenues rose by 25.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CVCO's debt-to-equity ratio is very low at 0.18 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 1.38, which illustrates the ability to avoid short-term cash problems.
  • CAVCO INDUSTRIES INC has improved earnings per share by 16.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CAVCO INDUSTRIES INC increased its bottom line by earning $3.15 versus $2.65 in the prior year. This year, the market expects an improvement in earnings ($3.70 versus $3.15).
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. 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.
  • Net operating cash flow has slightly increased to $8.47 million or 5.09% when compared to the same quarter last year. Despite an increase in cash flow, CAVCO INDUSTRIES INC's cash flow growth rate is still lower than the industry average growth rate of 50.38%.

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