Mario Gabelli Disposes 10.87% of his Skyline Shares

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As of Nov. 26, GAMCO Investors' Mario Gabelli has reported to shrinking his stake in Skyline Corp. ( SKY ) by about 8,300 shares from his last reported third quarter holding, according to GuruFocus Real Time Picks . The reduction places Gabelli at 6.17 percent ownership of the stock, which is about 0.75 percent less than his last reported percent of shares outstanding of the company.

With a market cap of $33.6 million, Indiana-based Skyline Corp. produces various mobile and trailer housing units, and has been in operation since 1951. Its products include manufactured housing, modular housing, recreational vehicles and park models.

Since the fourth quarter of 2008, Gabelli's trade activity pertaining to his Skyline stock consists of more reductions than increases over the years. He purchased the stock when it sold around $20. One of his largest gains from selling the stock came in the fourth quarter of 2010, when Gabelli sold more than 290,000 shares as Skyline's price skyrocketed to as high as $30.

Now, Skyline trades at $3.92, close to its 10-year low of $4. It has a Business Predictability rank of 1 star on GuruFocus, as well as 7 in Financial Strength and a 2 in Profitability and Growth.

SKY data by GuruFocus.com

For the past 10 years, Skyline's revenue has been falling at a rate of 12.2 percent; its revenue per share experienced the same negative trend line, declining at a rate of 13.48 percent in the past five years.

In its 2012 annual report, Skyline reported year-over-year increases in net sales, which management questions whether the growth will carry out in the following years due to the "continuing negative economic conditions."

During its fiscal year, Skyline closed its housing facilities in Vermont and California due to weak demand in its market areas. Skyline also sold its facilities in Florida and Pennsylvania.

Additionally, Skyline has been charged $400,000 in the third quarter as the settlement for the FEMA Formaldehyde Product Liability Litigation, a case proposed in May claiming exposure to formaldehyde in several travel trailer or park models resulted to several symptoms and injuries.

Skyline is pursuing several strategies to increase its sales and decrease its costs, including suspending its dividend payments until further notice to preserve its cash amounts, working with current and potential vendors to decrease costs and making staff reductions when appropriate.

Skylines receives three Severe Warning signs for a low Piotroski F-Score, a declining per share revenue and a declining gross margin. Its four Good Signs declare a strong Altman Z-Score and an expanding operating margin.

Besides Gabelli, other Gurus with Skyline holding include Chuck Royce, Jim Simons and Third Avenue Management.


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GuruFocus Real Time Picks alerts you of the stock purchases and sales that Gurus have made within the last two days. Follow your favorite Gurus closely with GuruFocus' Premium Membership! If you are not a Premium Member, we invite you for a 7-Day Free Trial.About GuruFocus: GuruFocus.com tracks the stocks picks and portfolio holdings of the world's best investors. This value investing site offers stock screeners and valuation tools. And publishes daily articles tracking the latest moves of the world's best investors. GuruFocus also provides promising stock ideas in 3 monthly newsletters sent to Premium Members .




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing

Referenced Stocks: SKY

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