“The sky’s the limit” is an apt adage for our latest new buy recommendation — Skyline Champion Corp. (SKY), a factory-built housing company in North America, states Mark Skousen, editor of the premium trading service, Fast Money Alert.
The company offers a portfolio of manufactured and modular homes, park model RVs, accessory dwelling units (ADUs) and modular buildings for the multi-family, hospitality, senior and workforce housing sectors.
It builds homes under brand names in the factory-built housing industry including Skyline Homes, Champion Home Builders, Genesis Homes, Athens Park Models, Dutch Housing, Excel Homes, Homes of Merit, New Era, Redman Homes, ScotBilt Homes, Shore Park, Silvercrest and Titan Homes in the United States and Moduline and SRI Homes in western Canada. Basically, anywhere you look and see manufactured homes, it’s a good bet Skyline is involved.
Skyline recently reported a huge earnings beat, coming in with earnings per share (EPS) of $1.18, well above estimates for just $0.78 per share. That’s year-over-year growth in EPS of 211%. Moreover, over the past three years, the company has posted annual EPS growth of 42%. The combined earnings growth puts this company in the top 1% in terms of EPS performance.
That strong earnings showing has lifted SKY shares, as the fast money races to be part of the stock. Yet over the past 52 weeks, SKY also has shown its relative strength mettle with a gain of some 77.3%. That gain is in the top 4% of all companies in terms of relative price performance.
Technically speaking, SKY has come roaring back off the late-January lows, as the stock got sold off along with the rest of the market. Yet since then, shares are up big, and we’ve now seen SKY recapture its 50-day moving average. We see a green light to jump into SKY. So, let’s buy Skyline Champion Corp. at market, with a protective stop at $58.70.
