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 Inc60.36 USD2.76Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar Canada. He previously produced content for Fidelity Investments and finance industry events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @Andrew_M_Willis.

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