Prefab Homes are on a Rise

There are several publically-traded companies in the RV space. You’ll probably recognize the name Winnebago (NYSE: WGO). But there’s also Thor Industries (NYSE: THO) and Drew Industries (NYSE: DW).

These companies are well-positioned to capitalize on the retirement boom. In fact, looking through the investor materials for these companies you’ll find the phrases “Baby Boomers” and “demographics tailwind” scattered throughout. These companies know their target market is greying and growing!

One company that has my interest is Drew Industries. That’s because, not only does it manufacture RVs and RV parts, it also serves the “manufactured home,” or “prefab,” market.

Drew’s stock has been on the rise for more than two years now. It will likely be a good buy opportunity at lower prices, but I’d wait for it to fall back to the lower part of its channel before getting in. Take a look…

See image larger

If you think about it, the prefabricated home market is likely to grow like gangbusters as the traditional property market continues to struggle. Drew Industries explains why… the cost per square foot of a site-built house is about $84. But it costs just HALF of that – or $41 per square foot – to build a manufactured home.

The prefab industry has increased production by 14% year-over-year. Drew’s production has increased by 25%.

And it’s not just established players ramping up production of low-cost, manufactured homes. There’s a small, family-run business in Miami, FL helping to drive the trend as well.

The company, called Cabin Fever, started selling prefab homes five years ago… after running a successful furniture business for over 20 years. Currently, it builds between 10 and 30 prefab homes every two weeks, but it’s not able to keep up with demand. So it’s looking to expand, eventually aiming to increase production capacity to 200 units every two weeks.

I’ll admit, RVs and prefabricated homes don’t make for a sexy investment story, but I think it’ll prove to be a profitable one!

If you haven’t done so already read the Survive & Prosper issue on “Demographic Trends: the Revenge of Retired Baby Boomers.”

 

 

Harry Dent’s Most Disturbing Prediction in Years

Harry Dent, one of the most respected economists in the industry, has uncovered a disturbing market event that could soon devastate millions of investors. In short, he has undeniable proof that one of the market’s safest and most popular investments is about to get slaughtered… and it will have dire consequences for those who don’t prepare right away.

For full details on the event Harry’s dubbed as the “Safe-Asset Slaughter”… and to ensure you escape the coming carnage, I urge you to watch this special presentation.

Click to Learn More
Categories: Economy

About Author

Adam O'Dell has one purpose in mind: to find and bring to subscribers investment opportunities that return the maximum profit with the minimum risk. Adam has worked as a Prop Trader for a spot Forex firm. While there, he learned the fundamentals of trading in the world’s largest market. He excelled at trading the volatile currency markets by seeking out low-risk entry points for trades with high profit potential. An MBA graduate and Affiliate Member of the Market Technicians Association, Adam is a lifelong student of the markets. He is editor of our hugely successful trading service, Cycle 9 Alert.