The bottleneck is inside and being paid away

UMH Properties, Inc. (UMH) — this company's answers

The model's full reasoning — Q3 2018 call → NOWe need answer YES/NO based on transcript. Need evaluate three conditions. Transcript: UMH Properties. Business: manufactured home communities, rentals, sales. Management says demand strong, sales up 67%, rentals strong, occupancy. They are adding rental homes, expanding communities. "We are on track to meet our annual goal of installing and renting 800 new homes this year. So far this year, we have added 608 rental homes." "We have broken ground on several of our expansions and anticipate completing 305 sites this year." "We are currently working to obtain approvals to build approximately 500 sites in 2019." So expansion underway. Is there live demand pressing in exceeding capacity? They say demand for rentals very strong in all markets. Sales demand strong. They have vacant sites 3,600. They fill with rental homes. They have ability to increase from 800? Analyst asks if capability to increase run rate, management says yes, have ability, watching demand. But is there a limit? They are adding 800 homes per year, but they have 3,600 vacant sites. They can comfortably serve? They are not constrained by capacity? They have vacant sites, so they can add more rentals if demand. They say "The most efficient way to fill the vacant sites and realize the value is to utilize the rental home program." They have 6,215 rentals, 93.3% occupied. Demand strong. But is there a shortage of company capability? They have ability to increase. They are expanding communities, but that's to create more sites. However, they have many vacant sites already. So the limit is not capacity? They are adding 800 rental homes per year, but could do more? They say "We have that ability" to increase from 800 to 900/1000. So no internal limit? They are not constrained by capability; they choose 800 based on demand? Actually they say "We predicted 800 for 2018 and it looks like that's going to be the number. But as demanding increases, we do have the ability to go faster." So demand is not exceeding capacity; they can go faster if demand increases. So condition 1? Live demand pressing in? Sales demand strong, but they can serve. They have vacant sites. They are not turning away business. They are expanding but not because capacity constrained? They are expanding to add sites, but they have vacant sites.

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