Cavco Industries walks into its fiscal Q4 print this evening with one of the most contested positioning setups in the homebuilding sector: a month-long short rebuild running headlong into an options market that has almost entirely abandoned downside protection.
The short side has been the dominant mover heading into today. Short interest has climbed to 5.2% of the free float, up more than 17% over the past month and roughly 37% above early-April levels. The ORTEX short score has ticked higher every session this week to 39.6 — a recent high — reflecting a methodical broadening of the short thesis rather than any forced technical squeeze. The borrow market offers no resistance to that build: cost to borrow is just 0.52% and availability is extraordinarily loose at 1,794%, nearly double the 52-week floor of 926%. Shorts face essentially zero friction adding to positions.
Options traders are reading the setup very differently. The put/call ratio has collapsed to 0.030 — the lowest reading of the past 52 weeks and more than one standard deviation below its 20-day average of 0.12. For most of April and into early May, the ratio was running near 0.19–0.24. The drop since May 7 is abrupt. Call positioning now dominates the options book almost entirely, a picture of unusual bullish conviction heading into a print — or, alternatively, a market that has simply stopped hedging. The stock itself jumped 6.5% on Wednesday alone and is up 7% on the week, even as it remains down 8% over the past month.
Peers add a complicating layer. SKY fell 5.4% on the week and TOL dropped 7.6%, while broader homebuilders like CCS and TMHC also retreated 8.7% and 5.3% respectively. CVCO's sharp single-day rally cuts against the sector grain — which raises the question of whether a stock-specific catalyst is already being priced in, or whether a mean-reversion risk is building. Insider activity adds a further note of caution: CEO William Boor sold 4,987 shares at $519.67 on April 10, and then the entire senior leadership team — CEO, CFO, two divisional presidents, and the Chief Accounting Officer — all sold on May 15, the day before yesterday, at $455.76. The 90-day net position is a sell of nearly $3 million. Analyst coverage is sparse and stale (the last meaningful target change was over a year ago), so the Street offers little fresh guidance into the release.
History sets a sombre reference point. The last earnings print in late January sent the stock down more than 24% in a single session, with losses extending to roughly 13% over the following five days. The question tonight is whether the rebuilt short book, the CEO's substantial April sale, and a stock trading against its sector peers on the eve of results represent a setup that the quarterly numbers can resolve — or deepen.
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