Legacy Housing Corp (NASDAQ:LEGH) Chairman of the Board, Curtis Drew Hodgson, recently sold a total of $74,396 worth of company stock, according to a new SEC filing. The transactions, which took place on October 7 and 8, 2024, involved the sale of 499 and 2,333 shares of common stock, respectively, all at a price of $26.27 per share.
The sales were executed under a prearranged 10b5-1 trading plan, a tool often used by company insiders to sell shares at predetermined times and prices to avoid any accusations of insider trading. Following these transactions, Hodgson's direct holdings in Legacy Housing Corp have decreased, yet he still maintains a significant stake in the company through both direct and indirect ownership.
Notably, Hodgson's indirect holdings include 1,000,000 shares owned by Hodgson Ventures, 2,669,056 shares by Hodgson 2015 Grandchild's Trust, and 100,000 shares by Cusach, Inc. As the general partner of Hodgson Ventures and controller of Cusach, Inc., Hodgson may be deemed to beneficially own the shares held by these entities.
Legacy Housing Corp, headquartered in Bedford, Texas, is a prominent player in the mobile homes industry, known for manufacturing and providing affordable housing options. The recent stock sale by the company's chairman may draw the attention of investors monitoring insider activity as an indicator of the company's financial health and future prospects.
Investors and market watchers often keep a close eye on insider transactions as they can provide valuable insights into the company's internal perspective on its stock's value and future potential. However, it is essential to consider a wide range of factors when evaluating the implications of such sales.
In other recent news, Legacy Housing Corporation has made significant strides in its financial recovery process. The mobile home manufacturer recently settled several promissory notes originally valued at approximately $55 million. This resolution follows a series of lawsuits initiated by the company after a default on about $37 million of these notes. As part of the settlement, Legacy will receive clear title and possession of two mobile home communities in Texas and Mississippi. The company will also issue a new two-year promissory note valued at $48 million, secured by more than 1,000 mobile homes and two parks in Louisiana.
In addition to the settlement, Legacy Housing has been making headlines with its record gross margins and an updated price target from B.Riley. The firm adjusted its price target for Legacy from $22.00 to $25.00, maintaining a neutral rating on the stock. This change was prompted by Legacy's first-quarter results, which saw revenues meeting expectations and a record gross margin leading to an earnings per share (EPS) of $0.60, surpassing the estimated $0.38.
These recent developments reflect Legacy Housing's ongoing efforts to strengthen its financial position and deliver value to its investors. B.Riley analysts have noted that the company's consistent value creation and recent share buybacks contribute to confidence and provide some protection against downside risks.
InvestingPro Insights
To provide additional context to Legacy Housing Corp's recent insider activity, let's examine some key financial metrics and insights from InvestingPro.
Legacy Housing Corp currently boasts a market capitalization of $631.13 million, with a price-to-earnings (P/E) ratio of 11.68. This relatively low P/E ratio suggests that the stock may be undervalued compared to its earnings potential. Moreover, the company's price-to-book ratio stands at 1.36, indicating that the stock is trading close to its book value.
One InvestingPro Tip highlights that Legacy Housing operates with a moderate level of debt. This conservative financial approach could be seen as a positive factor, especially in the current economic climate where interest rates are a concern for many businesses.
Another InvestingPro Tip notes that the company's liquid assets exceed its short-term obligations. This strong liquidity position provides financial flexibility and reduces the risk of cash flow issues in the near term.
Despite the recent insider sale, it's worth noting that Legacy Housing has been profitable over the last twelve months, with a revenue of $169.39 million. The company's gross profit margin stands at an impressive 50.97%, indicating efficient cost management in its manufacturing operations.
Interestingly, while the company has shown profitability, it does not currently pay a dividend to shareholders. This could suggest that Legacy Housing is reinvesting its profits back into the business for growth or maintaining a cash reserve.
For investors seeking more comprehensive analysis, InvestingPro offers additional tips and insights. In fact, there are 5 more InvestingPro Tips available for Legacy Housing Corp, which could provide valuable information for those considering an investment in the company.
These financial metrics and insights offer a broader perspective on Legacy Housing's financial health and market position, complementing the information about the recent insider sale. As always, investors should consider multiple factors, including insider transactions, financial performance, and market conditions, when making investment decisions.
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