Stock of the Week: Winnebago Industries

More than a massive RV backlog.

Andrew Willis 15 November, 2021 | 5:48AM
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Andrew Willis: As we head into cooler weather, one might think that the recreational vehicle industry has a chance to catch up with demand from campers.

Not a chance. 4 billion dollars’ worth of RVs are still on order at one company alone… At Winnebago Industries (WGO), pandemic-induced demand has brought on a backlog that’s grown from only 400 million dollars worth of campers at the end of 2019…

And while a ten-fold leap in orders for motor homes is exciting, the company has been doubling – or at least tripling – down in the outdoor lifestyle segment by buying a towable product maker, along with two boat manufacturers.

Sector strategist David Whiston notes that leadership at the company wants new products, in new segments – including off-roading – and at a lower price point. Winnebago is a more aggressive firm than it used to be, especially around the acquisitions.

But we like the purchases so far. For one, from a downside risk perspective, companies that make trailers don’t suffer as much as RVs in downturns. And it would be hard to worry about results for a few years – what with an expected 600,000 Winnebagos to build.

For Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Winnebago Industries Inc73.13 USD1.84Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor for Morningstar.ca. Follow him on Twitter @AndrewWillisCDN.

 

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