ISIM - HUGE find Buffett bets on prefab homes
There are a few reasons for long-term investors to look at stocks of manufactured homes. For one, the sector isn't being hit by the subprime lending mess.
By Michael Brush
Few would call Warren Buffett unwise with his money. It takes some smarts to build a fortune of $46 billion, after all.
So what's he doing raising money in the housing sector? Specifically, why is he helping put three-quarters of a billion dollars into manufactured homes, those humble, modestly priced abodes that come shipped in prefabricated components, ready for assembly?
Sales of manufactured homes have been sluggish for years because the industry missed out on the lift from subprime loans. Now, with mortgage lending tightening up and the entire housing market in the dumps, sales of factory-built homes are the lowest they've been in 45 years.
So what's a smart investor like Warren Buffett doing here?
A month ago, Berkshire Hathaway (BRK.A, news, msgs) used its AAA credit rating to raise $750 million through a debt offering for Clayton Homes, a provider of factory-built homes that's in the Oracle of Omaha's portfolio of holdings.
This means it may be time for long-term investors to begin putting money into prefab-home stocks, says Robert Robotti of Robotti & Co. investment advisers, which already holds several of the stocks. Robotti is worth listening to because he's a value investor like Buffett, with Buffett-like returns. His shop has posted after-fee compound annual returns of 20% for the past five calendar years, compared with gains of 11.4% for the Russell 2000 Index $RUT.X).
"To me this is classic contrarian investing in the sense that you become aggressive when everyone else is pulling back," says another index-beating value investor, Robert Rodriguez, whose First Pacific Advisors also has exposure to the sector. "I was encouraged to see that capital was being allocated to this industry. I view that as a positive."
The bank of Buffett
Rodriguez and other observers, including top managers at some of the key factory-built-home producers, think Clayton will use the money to back mortgage lending in the space. Given the casualties among other home mortgage lenders, it makes sense for Buffett to borrow money at the reasonable rates he can get because of his stellar credit rating and take advantage of rising rates in this corner of the mortgage market.
Clayton has two financing divisions, Vanderbilt and 21st Mortgage, that make loans in the sector. "By raising this capital they become the dominant financer of this industry," says Rodriguez. "I think it is intriguing that he is doing this."
Ehh..... Clayton Homes slightly different than Simply Constructed.
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So ISIM's new subsidiary Simply Constructed's (SC) office is the same office as some other penny stocks (ISIM also). Do a Google search. Not to mention that address is associated with Simply DJ Services, another Wyoming Company. This was a pre-meditated deal that finally was put on paper. Note that the original incorporator is Edward De Parma. Do your own DD on him. A hint, there is a lot to look into. You'll find some very similiar addresses.
Wyoming is becoming a popular state option to incorporate in though, so I will give them the benefit of doubt.
Simply Constructed's website has press releases from 2008. I want to know what state that Simply Constructed Dissolved in before incorporating in Wyoming, in 2010??? Again, this was probably a pre-meditated deal before the paperwork move to Wyoming.
ISIM has issued over 100,000,000 shares since their 10Q filing in August. 100 Million shares in 3 months? I guess having $26 bucks in cash compared to $632,996 in liabilities (June 30th) will do that.....
Issued $5,000,000 in Convertible Preferred shares to pay for SC. Convertible on Company's Notice. Equal to half the bid price 3 days prior to conversion. Thus even at half its current price (.0017) that's over 5 Billion Common shares. Thus this common stock essentially is worth nothing for current holders. Granted this won't happen anytime soon, its always good to look at the fully diluted share structure.
Not to mention Simply Constructed although having press releases dated 2008, and an obvious website copyright of 2007, is still in development phase.
I know this is getting hyped on ihub, but be aware of the above and don't stay in this to long. JMHO. Trade a penny like a penny.
Few would call Warren Buffett unwise with his money. It takes some smarts to build a fortune of $46 billion, after all.
So what's he doing raising money in the housing sector? Specifically, why is he helping put three-quarters of a billion dollars into manufactured homes, those humble, modestly priced abodes that come shipped in prefabricated components, ready for assembly?
Sales of manufactured homes have been sluggish for years because the industry missed out on the lift from subprime loans. Now, with mortgage lending tightening up and the entire housing market in the dumps, sales of factory-built homes are the lowest they've been in 45 years.
So what's a smart investor like Warren Buffett doing here?
A month ago, Berkshire Hathaway (BRK.A, news, msgs) used its AAA credit rating to raise $750 million through a debt offering for Clayton Homes, a provider of factory-built homes that's in the Oracle of Omaha's portfolio of holdings.
This means it may be time for long-term investors to begin putting money into prefab-home stocks, says Robert Robotti of Robotti & Co. investment advisers, which already holds several of the stocks. Robotti is worth listening to because he's a value investor like Buffett, with Buffett-like returns. His shop has posted after-fee compound annual returns of 20% for the past five calendar years, compared with gains of 11.4% for the Russell 2000 Index $RUT.X).