As of Nov. 26, GAMCO Investors'
has reported to shrinking his stake in Skyline Corp. (
) 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
rank of 1 star on GuruFocus, as well as 7 in
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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