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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Archie Meeties who wrote (10396)	4/20/2000 5:53:00 PM
From: Michael Burry	Read Replies (1) \| Respond to of 78507

Yeah, but I think the market is right in that you have to look at manufactured housing separate from the site-built home industry (stock prices of the two groups don't fluctuate together). Clayton's average home price is about $42,000 - they are really competing, and very competitive with, rental prices for apartments. It is the low-rent part of the housing industry. The MH industry's loans have been considered sub-prime since last year, and financing has tightened up drastically. Demand has already taken a significant hit since early 99. Of course, there is room for more hits. But then you see that 44% of Clayton's income is recurring, and that its business of scrubbing loan portfolios for resale makes up over half of operating income, and at least in my eyes, they are appropriately positioned to weather any further hits to demand. In any case, the supply adversity and further potential demand adversity is already factored into the price. The conference call is published on their web site and is a must-hear for potential investors. With CNF, it is a company that never really took off stock-wise throughout this economic boom. IMO it came from the top. Good investing, Mike