The Misfits: Cavco Industries (CVCO)

Cavco has been a good investment in manufactured housing, but separating the business from social and political views can be challenging.

Saint Joseph, Charpentier, George de la Tour, circa 1642, oil on canvas (Louvre)

Becoming a better investor is all about filling the gaps. These gaps can come in many forms. They can be knowledge gaps on analyzing a company or valuing a stock. Or, it can be emotional gaps and learning to how to temper’s one’s inclination of fear and greed.

These are the big ones that, if “mastered” (if that is even a thing), can lead to most people becoming above-average investors. Filling the gaps isn’t limited to these two things, though. One aspect of filling our knowledge and emotional gaps is being able to view businesses dispassionately when they may orient with your moral or political compass.

I cut my investing teeth in the energy sector. I can’t think of an industry that is a better example of this phenomenon. Many investors, from the novice to the tenured, have invested in renewable energy companies because they believe it can be a viable (and perhaps worse, more virtuous) means of mitigating climate change.

There are a few companies in this industry that have done well (my personal portfolio can attest to that). Still, there have also been numerous companies that have lit investor money on fire (my personal portfolio can attest to that). Evaluating a company you want to succeed can easily blind you to its potential and positives while ignoring its pitfalls.

This rambling open gets me to Cavco Industries (NASDAQ: CVCO). It is absolutely a company that falls into the “I want this to succeed. Therefore, it will succeed” zone for me.

But, it does help that the company has done spectacularly since its IPO in 2003.

You may think it a bit weird that someone would feel so strongly about a manufactured and modular home builder that their stock analysis would be skewed by their societal beliefs.

To that, I say you must be new here. I promise it won’t be the last time you think I go down weird rabbit holes.

Let’s dig into Cavco, warts and all, and why I may be viewing this one through horseblinders.

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