Curtis Drew Hodgson, Chairman of the Board at Legacy Housing Corp (NASDAQ:LEGH), recently sold a significant portion of the company's common stock. On October 11 and October 14, Hodgson sold a total of 26,480 shares, generating proceeds of approximately $698,224. The shares were sold at prices ranging from $26.27 to $26.42 each. Following these transactions, Hodgson retains direct ownership of 578,641 shares. Additionally, he holds indirect ownership through various entities, including Hodgson Ventures and the Hodgson 2015 Grandchild's Trust. These sales were executed under a pre-established 10b5-1 trading plan.
In other recent news, Legacy Housing Corporation has had significant developments. The company recently settled several promissory notes, originally valued at approximately $55 million, following a series of lawsuits due to a default. To refinance the remaining debt, Legacy Housing 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.
In addition to the settlement, Legacy Housing has been in the spotlight following record gross margins and an updated price target from B.Riley. The firm increased its price target for Legacy Housing from $22.00 to $25.00, maintaining a neutral rating on the stock. This adjustment came after 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.
These recent developments indicate a period of financial recovery for Legacy Housing. B.Riley analysts have emphasized Legacy Housing's consistent value creation, noting recent share buybacks and potential value from the company's various development properties. However, they will be closely monitoring for sustained improvement in gross margins and consistent improvement in unit sales.
InvestingPro Insights
While Curtis Drew Hodgson's recent stock sales might raise eyebrows, a closer look at Legacy Housing Corp's (NASDAQ:LEGH) financial metrics provides additional context. According to InvestingPro data, the company boasts a market capitalization of $663.98 million and a P/E ratio of 12.27, suggesting a relatively modest valuation compared to industry peers.
InvestingPro Tips highlight that Legacy Housing operates with a moderate level of debt and maintains liquid assets that exceed short-term obligations. These factors indicate financial stability, which could explain why insiders like Hodgson might feel comfortable selling shares without signaling distress.
The company's stock has seen a significant price uptick over the last six months, with a 32.7% total return. This aligns with the broader market trend and may have influenced the timing of Hodgson's sales. Despite this positive momentum, it's worth noting that two analysts have revised their earnings downwards for the upcoming period, suggesting some caution in near-term expectations.
Legacy Housing's financial health appears robust, with a gross profit margin of 50.97% and an operating income margin of 36.32% for the last twelve months as of Q2 2024. However, the company has experienced a revenue decline, with a 28.94% decrease over the same period, which investors should monitor closely.
For those seeking a more comprehensive analysis, InvestingPro offers 6 additional tips for Legacy Housing, providing deeper insights into the company's financial position and market performance.
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