Oakwood pays its dues for finance-division blues.

• Author: Speizer, Irwin
• Position: Oakwood Homes Corp

These are good times for manufactured housing, but try telling that to Oakwood Homes Corp. While most of its competitors had strong numbers in 1998, Greensboro-based Oakwood, the industry's largest retailer and third-largest manufacturer, disappointed analysts with crummy earnings. The reason: its poor-performing finance division. The former Wall Street sweetheart saw its stock price slump, and irate investors filed a series of class-action lawsuits in November.

Still, for the long-term investor, Oakwood (OH-NYSE) is worth a look. Its manufacturing and sales divisions - the heart of its business - have continued to perform well, and it has revamped its finance division, taking a far more conservative approach to predicting its income.

"The Street has been punishing them mightily, penalizing them by $5 or $10 a share. It's ridiculous," says Timothy L. Jones, senior vice president of Southeast Research Partners Inc. in Boca Raton, Fla. At the end of December, the stock was trading at about $15, off its all-time peak of nearly $42 in March 1998. Jones thinks Oakwood is poised for a comeback and figures the stock could easily rebound to $25 in 1999.

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