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Winnebago, Thor Stock Trading at ‘Near Highs’

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September 25, 2013 by   Leave a Comment

Sales of recreational vehicles are up. As reported by Investors Business Daily (IBD), RV shipments for the year through July improved 13% from the same period last year, according to the Recreation Vehicle Industry Association (RVIA).

The industry continues to recover from the Great Recession, having suffered some of the same meltdown as the housing market. Motorhomes are considered second homes for tax purposes, and many buyers take out mortgages.

So with growth returning and earnings rising, it’s no surprise that the Building-Mobile/Manufactured Home industry group is ranked 19th out of 197 industry groups tracked by IBD. It has seven members, but only three have significant ratings.

Thor Industries (THO) is the No. 1 company in the business, with a composite rating of 96. It makes RVs under the Airstream and other brand names. It has an EPS rating of 96. Earnings grew 24% in the April-ended quarter, and analysts are forecasting a 13% increase in the next report. They’re expecting a 26% growth rate for the full year and a 17% increase next year.

The stock has recently carved out a flat base that has corrected 12%. All the companies in the group are thinly traded. Thor is the most active, trading 362,000 shares a day.

Winnebago Industries (WGO) is the second-strongest stock in the group, with a composite rating of 95. It lost money in 2008 and 2009, but is recovering. Earnings last quarter rose 108% and are expected to rise 93% to 27 cents a share in the current August-ended quarter. It also is building the right side of a base. The stock’s average daily volume is 229,000 shares.

• A third company in the group, Drew Industries (DW), has strong earnings growth over the past three years. It trades a mere 89,000 shares a day. Drew is parent to suppliers Lippert Components Inc. and Kinro Inc.

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