Legacy Housing Corp (NASDAQ:LEGH) Chairman of the Board Curtis Drew Hodgson recently sold a significant number of shares in the company. On September 30, 2024, Hodgson sold 17,300 shares at a price of $27.27 per share, totaling approximately $471,771. This transaction was executed under a pre-arranged 10b5-1 trading plan, which allows company insiders to sell stocks at a predetermined time to avoid accusations of insider trading.
The sale was part of a series of transactions disclosed in a recent filing with the Securities and Exchange Commission (SEC). According to the filing, after the sale, Hodgson still retains a substantial number of shares in the company. Directly, he owns 613,241 shares. Additionally, through various entities, he has indirect ownership of more shares: 1,000,000 shares through Hodgson Ventures, 2,669,056 shares through Hodgson 2015 Grandchild's Trust, and 100,000 shares through Cusach, Inc.
Hodgson, as the general partner of Hodgson Ventures and controller of Cusach, Inc., is considered to have beneficial ownership of the shares held by these entities. The transactions are part of the normal course of business and are reported in compliance with SEC regulations. The filing also included a power of attorney dated October 23, 2023, authorizing Max M. Africk to perform certain actions on behalf of Hodgson concerning SEC filings.
Investors and market watchers often monitor insider transactions as they can provide insights into executives' confidence in the company's future performance. Legacy Housing Corp, headquartered in Bedford, Texas, specializes in the manufacturing of mobile homes, a sector that has seen varying demand over the years.
The reported sale by the chairman is a notable event for shareholders and potential investors, reflecting a sizable change in his direct stake in the company. However, with the remaining indirect holdings, Hodgson continues to have a significant interest in the future of Legacy Housing Corp.
In other recent news, Legacy Housing Corporation has settled approximately $55 million in promissory notes following a series of lawsuits due to a default on about $37 million of these notes. As part of the settlement, Legacy will receive clear title and possession of the Forest Hollow Mobile Home Community in Texas and the Cleveland Mobile Home Community in Mississippi. Additionally, Legacy will issue a new two-year promissory note valued at $48 million, secured by over 1,000 mobile homes and two mobile-home parks in Louisiana.
In other developments, Legacy Housing reported revenues meeting expectations and a record gross margin leading to earnings per share (EPS) of $0.60, surpassing the estimated $0.38. Despite a 20% year-over-year decline in the number of home sections sold, the average price per section fell by only 11% to $47,800. The company also initiated a share repurchase for the first time since 2020.
B.Riley has increased its price target for Legacy Housing from $22.00 to $25.00, maintaining a neutral rating on the stock. The firm noted that Legacy Housing has consistently been a reliable creator of value, with a history of annual book value growth in the teens percentage range. These are the recent developments surrounding Legacy Housing Corporation.
InvestingPro Insights
To provide additional context to Chairman Curtis Drew Hodgson's recent share sale, let's examine some key financial metrics and insights from InvestingPro for Legacy Housing Corp (NASDAQ:LEGH).
Despite the recent insider sale, Legacy Housing Corp has demonstrated strong financial performance. According to InvestingPro data, the company boasts a market capitalization of $661.81 million and a price-to-earnings (P/E) ratio of 12.2, suggesting a relatively attractive valuation compared to industry peers.
One InvestingPro Tip highlights that Legacy Housing Corp operates with a moderate level of debt, which could be seen as a positive factor for financial stability, especially important in the cyclical mobile home manufacturing sector. This conservative financial approach may provide the company with flexibility to navigate market fluctuations.
Another InvestingPro Tip notes that the company has seen a strong return over the last three months, with a 22.81% price total return. This aligns with the broader trend observed in the data, showing a significant 28.89% price total return over the past six months. These figures suggest that despite the chairman's sale, the market maintains a positive outlook on the company's prospects.
It's worth noting that while Chairman Hodgson has reduced his direct holdings, InvestingPro data indicates that Legacy Housing Corp has been profitable over the last twelve months, with a revenue of $169.39 million and an impressive operating income margin of 36.32%. These strong fundamentals may explain why Hodgson maintains substantial indirect ownership through various entities.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and metrics beyond what's discussed here. In fact, there are 8 more InvestingPro Tips available for Legacy Housing Corp, providing a deeper dive into the company's financial health and market position.
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