Curtis Drew Hodgson, Chairman of the Board at Legacy Housing Corp (NASDAQ:LEGH), recently sold 17,300 shares of the company's common stock, according to an SEC filing. The shares were sold at an average price of $25.20, totaling approximately $435,960. Following this transaction, Hodgson holds 560,041 shares directly. Additionally, he maintains indirect ownership through various entities, including Hodgson Ventures and Hodgson 2015 Grandchild's Trust. This sale was conducted under a prearranged trading plan, known as a 10b5-1 plan, established earlier this year.
In other recent news, Legacy Housing Corporation has made significant strides in its financial recovery process. The company recently settled several promissory notes originally valued at $55 million, following a series of lawsuits after the makers defaulted on approximately $37 million of these notes. The settlement agreement, which includes the assignment of all intangible assets related to certain properties and an irrevocable waiver of all claims related to existing deposits, will see Legacy receiving clear title and possession of the Forest Hollow Mobile Home Community in Texas and the Cleveland Mobile Home Community in Mississippi.
To refinance the remaining debt, Legacy will issue a new two-year promissory note valued at $48 million, backed by over 1,000 mobile homes and two mobile-home parks located in Louisiana. The company's decision not to set aside a loan loss provision indicates confidence in the value of the collateral securing the new note.
In addition to this, Legacy Housing has been making headlines with record gross margins and an updated price target from B.Riley. The firm raised its price target for Legacy Housing from $22.00 to $25.00, maintaining a neutral rating on the stock. This came following Legacy Housing's first-quarter results, where the company 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 year-over-year decline in the number of home sections sold, the average price per section fell by only 11% to $47,800, marking a significant recovery from the previous quarter.
In response to these recent developments, B.Riley revised its estimates upward and will continue to monitor Legacy Housing for evidence of sustained improvement in gross margins, consistent improvement in unit sales, and realization of potential value from the company's various development properties.
InvestingPro Insights
As Curtis Drew Hodgson reduces his stake in Legacy Housing Corp (NASDAQ:LEGH), investors might be curious about the company's current financial position and market performance. According to InvestingPro data, Legacy Housing has a market capitalization of $614.95 million and trades at a P/E ratio of 11.42, suggesting a relatively modest valuation compared to some industry peers.
Despite the recent insider sale, Legacy Housing's financials show some positive indicators. An InvestingPro Tip highlights that the company operates with a moderate level of debt, which could provide financial flexibility in the current economic environment. Additionally, the company's liquid assets exceed short-term obligations, indicating a healthy short-term financial position.
However, it's worth noting that Legacy Housing has experienced a revenue decline, with a 28.94% decrease in the last twelve months as of Q2 2024. This contraction in top-line growth might explain why two analysts have revised their earnings expectations downwards for the upcoming period, as another InvestingPro Tip reveals.
On a positive note, Legacy Housing has demonstrated profitability over the last twelve months, with analysts predicting continued profitability for the current year. The company's operating income margin stands at an impressive 36.32%, reflecting efficient operations despite the revenue challenges.
For investors seeking a more comprehensive analysis, InvestingPro offers additional insights with 6 more tips available for Legacy Housing. These tips could provide valuable context for understanding the company's position in the manufactured housing market and its potential for future growth.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.