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Lowest EV/EBITDA Ratio in the Homebuilding Industry Detected for Cavco Industries (CVCO, NVR, MHO)

Published on Fri, 01/18/2013 - 11:26
By Mallory Stone

Below are the three companies in the Homebuilding industry with the lowest enterprise value to EBITDA (EV/EBITDA) ratios. EV/EBITDA is an important metric used in valuing comparable companies. It is capital structure neutral and generally the lower the ratio, the more undervalued the company is believed to be.

Cavco Industries (NASDAQ:CVCO) is lowest with an EV/EBITDA ratio of 11.79. Cavco Industries, Inc. produces manufactured homes in Arizona and sells its products to independent retailers in various states. Cavco Industries has traded 3,000 shares thus far today, vs. average volume of 35,000 shares per day. The stock has underperformed the Dow (-0.2% to the Dow's -0.1%) and matched the S&P 500 (with a -0.2% move) during today's trading.

Following is NVR Inc (NYSE:NVR) with an EV/EBITDA ratio of 18.68.

Finishing up the bottom three is M/I Homes (NYSE:MHO), with an EV/EBITDA ratio of 21.39.

By Mallory Stone
mstone@fnno.com