Why One Fund Just Put $23.5 Million Into Champion Homes Despite an 18% Stock Slide
Key Points
California-based Tensile Capital Management acquired 308,162 shares of Champion Homes for an estimated $23.5 million in the third quarter.
The new position represents 2.9% of 13F reportable assets under management at quarter-end.
Though sizable, the Champion Homes stake remains outside the fund’s top five holdings.
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On November 14, California-based Tensile Capital Management disclosed a new position in Champion Homes (NYSE:SKY), acquiring 308,162 shares valued at approximately $23.5 million, according to its latest SEC filing.
What Happened
According to a filing submitted to the U.S. Securities and Exchange Commission on November 14, Tensile Capital Management LP established a new holding in Champion Homes. The position totals 308,162 shares with a reported market value of $23.5 million as of the quarter ending September 30.
What Else to Know
The position represents 2.9% of Tensile's $800.4 million in U.S. equity holdings reported in the third-quarter filing.
Top holdings after the filing:
- NASDAQ: VERX: $94.3 million (11.8% of AUM)
- NYSE: DKS: $79.5 million (9.9% of AUM)
- NYSE: VVV: $74.7 million (9.3% of AUM)
- NYSE: LAD: $74.4 million (9.3% of AUM)
- NYSE: USFD: $58.5 million (7.3% of AUM)
As of Friday, shares of Champion Homes were priced at $85.38, down 18% over the past year and well underperforming the S&P 500, which is up 13% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Price (as of market close Friday) | $85.38 |
| Market capitalization | $4.8 billion |
| Revenue (TTM) | $2.6 billion |
| Net income (TTM) | $220.8 million |
Company Snapshot
- Champion Homes produces and sells factory-built housing, including manufactured and modular homes, park model RVs, accessory dwelling units, and modular buildings for multi-family and hospitality applications.
- The company generates revenue through the design, manufacture, and direct sale of factory-built homes, as well as construction services, transportation, and a network of company-owned retail centers.
- It serves homebuyers, real estate developers, and institutional clients across North America, with a focus on the United States and western Canada.
Champion Homes is a leading North American provider of factory-built housing solutions, operating under multiple well-known brands. The company leverages an integrated business model that spans manufacturing, retail, installation, and transportation, enabling efficient delivery and customization of residential and commercial structures. With a diversified product portfolio and a strong presence in both the United States and Canada, Champion Homes is positioned to address a wide range of housing needs in the residential construction market.
Foolish Take
Champion’s volatility this year makes an institutional move like this meaningful, especially when fundamentals have strengthened despite a choppy housing backdrop. Tensile’s entry comes after the company delivered another quarter of solid execution, with net sales up 11% to $684.4 million and EPS rising nearly 10% to $1.03 as factory-built housing demand held firm. The company also expanded gross margin to 27.5%, boosted backlog, and generated $75.9 million in operating cash while repurchasing $50 million of stock. Those operational trends create a clearer long-term earnings runway than the stock’s recent pullback suggests.
Within Tensile’s portfolio, Champion becomes a mid-sized but meaningful position at 2.9% of assets—consistent with the firm’s pattern of accumulating category leaders with defensible unit economics. For long-term investors, Champion’s integrated retail, manufacturing, and logistics model, combined with steady price and volume gains, supports durability even in uncertain housing cycles.
Glossary
13F reportable assets: Investment holdings that institutional managers must disclose quarterly to the SEC on Form 13F.
Assets under management (AUM): The total market value of investments managed by a fund or investment firm.
Compound annual growth rate (CAGR): The annualized rate of return for an investment over a specified period, assuming profits are reinvested.
Trailing twelve months (TTM): The 12-month period ending with the most recent quarterly report.
Factory-built housing: Homes or buildings constructed in a factory and then transported to their final site for installation.
Modular homes: Homes built in sections in a factory, then assembled on-site, meeting local building codes.
Park model RVs: Recreational vehicles designed for long-term placement, often used as seasonal or vacation housing.
Accessory dwelling units (ADUs): Secondary housing units on a single-family residential lot, such as backyard cottages or in-law suites.
Integrated business model: A company structure where multiple stages of production and distribution are controlled within the same organization.
Institutional clients: Organizations such as pension funds, insurance companies, or investment firms that invest large sums of money.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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