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4 RV Stocks to Add Color to Your Christmas Shopping

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While the coronavirus pandemic continues to endanger lives, the show must go on when it comes to Christmas celebrations and shopping. While people are seeking out exciting ways to splurge this holiday season, it may be a good idea to set aside some of the hard-earned money for buying gifts (read stocks) that will ensure consistent returns. So, why not stuff your stockings with stocks that are poised to generate handsome returns?

In this write-up, we shall discuss about the recreational vehicle (RV) industry, which seems to have gained a new lease of life, thanks to the pandemic. With the industry set to continue its momentum, it will be a wise decision to invest in some of the most promising stocks in the RV market.

RV Vacations: The Best Social-Distance Travel Option

The pandemic has proven a shot in the arm for RV companies. Since June, the RV industry has been experiencing high demand and sales that have not been witnessed in a long time. RV vacations are offering people the much-needed freedom and fun as they are looking for ways to venture out as well as travel responsibly. These vehicles are typically equipped with bed, washroom, kitchen, dishes, etc, making it easier to practice social distancing. There’s no need to share a hotel elevator or airplane bathroom. Travelers can cook meals inside the vehicle. In light of the present circumstances, RV vacations seem to be the safest bet amid the coronavirus pandemic. Not just RV developers are deploying new and superior technologies to enhance efficiency as well as convenience, consumers are also getting enthusiastic for off-the-grid living.

According to RV Industry Association, RV shipments jumped 43.4% year over year to 42,513 units last month, marking the highest-ever tally for the month of November. Towable RVs climbed 46.3% year over year to 38,485 units. This was mainly aided by a 49.5% surge in conventional travel trailers units. Motorhomes increased 20.3% year over year to 4,028 units for the month.

While there is a lot of optimism surrounding vaccine, coronavirus cases are still on the rise. The social distancing theme is here to stay, with cautious public likely to shun the normal means of travel for quite some time. Per a study conducted by the RV Industry Association, 61 million Americans plan to take an RV trip in the next 12 months. This is a boon for RV manufactures and dealers.

Total RV shipments for 2021 are forecast at 507,200 units, implying year-over-year growth of 19.5%. If the projections come true, it will mark the best year ever for the RV industry, eclipsing the record attained in 2017, wherein shipments of 504,600 units were recorded. Amid the rosy scenario, it’s time for you to go RVing with the below-mentioned stocks.

4 Winners

Winnebago Industries WGO: Iowa-based Winnebago is one of the leading RV producers in the United States. The company has been riding on the strength of its acquisitions, including Newmar, Grand Design and Chris-Craft. Winnebago put on a stellar show in the last reported quarter, with its top and bottom lines surging 34.8% and 131.5%, respectively, on a year-over-year basis. Winnebago’s increasing free cash flow and strengthening balance sheet enable it to consistently enhance shareholder value and outperform the marketplace. Strong backlog in both Towable and Motorhome segments is poised to keep the momentum going for Winnebago. The Zacks Consensus Estimate for fiscal 2021 earnings and sales signals year-over-year growth of 110.5% and 33.9%, respectively. An impressive earnings surprise history and northbound estimate revisions are fueling optimism on the stock. The company currently carries a Zacks Rank #1 (Strong Buy) and has a VGM Score of A.You can see the complete list of today’s Zacks #1 Rank stocks here.

Thor Industries THO: Indiana-based Thor Industries is the largest manufacturer of RVs in the world. The EHG buyout boosted Thor’s position in the European market and is likely to provide the firm with attractive long-term growth opportunities. A couple of days back, it announced the acquisition of Tiffin Motorhomes to boost portfolio. Thor’s commitment to enhance shareholder value is commendable. In the last reported quarter, its earnings and sales saw year-over-year growth of 123% and 17.5%, respectively. Consolidated backlog totaled $8.92 billion at quarter-end, representing a 194.5% jump from the year-ago period. The company remains optimistic to achieve the ambitious target of $14 billion in annual net sales by fiscal 2025-end. The Zacks Consensus Estimate for fiscal 2021 earnings and sales signals year-over-year growth of 62.5% and 26.4%, respectively. The company carries a Zacks Rank #2 (Buy) and has a VGM Score of A at present.

LCI Industries LCII: New York-based LCI Industries is engaged in the supply of premium components for the RV industry through wholly-owned subsidiary Lippert Components, Inc. The RV component maker actively focuses on growth through bolt-on acquisitions, having closed 50 mergers and acquisitions in the past 20 years. It recently completed twin buyouts of Veada Industries and Challenge Door, LLC, which are expected to fuel prospects. In the last reported quarter, net sales of LCI Industries were up 41% year over year, led by RV shipments that rose 37% from the corresponding quarter of 2019. Importantly, the firm displays a five-year CAGR of 15% and 16% for revenues and EBITDA, respectively. A strong balance sheet and investor-friendly moves bode well. The Zacks Consensus Estimate for 2021 earnings indicates 31.46% year-over-year growth. The company presently carries a Zacks Rank #2 and has a VGM Score of B.

Camping World Holdings Inc. CWH: Illinois-based Camping World is one of the noted RV sellers and component suppliers. Of late, it has been on an acquisition spree to expand footprint and product offerings. Key buyout deals with Paul Sherry RV, All RV Needs, Outlet Recreation dealership based in the Fargo market and four existing dealership locations of Noble RV will further solidify its position in the industry. In the last reported quarter, net sales of Camping World were up 21% year over year, driven by higher shipments. For the nine months ended Sep 30, the company turned a net profit of around $108 million versus the year-ago period’s loss of $32 million. Amid the encouraging results, the firm cheered up investors with a stock buyback authorization program. The stock has an expected EPS growth rate of 34.7% for the next three-five years. Camping World currently carries a Zacks Rank #3 and has a VGM Score of A.

Zacks Top 10 Stocks for 2021

In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?

These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Start Your Access to the New Zacks Top 10 Stocks >>

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Thor Industries, Inc. (THO) : Free Stock Analysis Report
Camping World Holdings Inc. (CWH) : Free Stock Analysis Report
Winnebago Industries, Inc. (WGO) : Free Stock Analysis Report
LCI Industries (LCII) : Free Stock Analysis Report
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