Add the Motley Fool investor-oriented electronic news service to those that believe Monaco Coach Corp., and the diesel pusher Class A motorhome market in general, will remain strong despite high fuel prices.
“Monaco Coach is one company that believes its product offerings will be in demand regardless of gas prices,” Motley Fool columnist Will Ashworth wrote in a recent column. “It is the largest producer of Class A diesel motorhomes in the country, with 30% market share, and the second-largest manufacturer of Class A motor homes (counting both diesel and gasoline), with 18% market share. Only Fleetwood Enterprises has more, with 21.5%.”
As people in the RV industry know, and more people in the general population are coming to realize, the reason for Monaco’s upbeat attitude is demographics, according to Ashworth.
“More and more people are retiring before they hit the age of 65,” he wrote in the column. “This has provided the RV industry with a massive group of potential customers seeking to enjoy their retirement years in comfort and style while seeing parts of the country they didn’t have time for in their prime working years.
“Monaco’s target market is retirees and those nearing retirement age. These customers are brand loyal and will own three to five different vehicles over their lifetimes, changing them every three to five years and usually upgrading each time to a newer and swankier version. The company’s latest first-quarter report shows that the factories are working full steam ahead to meet this demand.
“The firm sold 32% more vehicles this (year’s first) quarter compared to last, and more important, the jump resulted in an earnings per share increase of 166%. When compared to earnings per share from the first quarter of 2002 – the highest in company history – they were up a respectable 21%. Very good news for understandably concerned shareholders.
“With the population of 45- to 74-year-olds set to grow 35% in the next five years compared to 13% for the general population, it appears more and more people will be looking to Monaco and the open road. That’s great news for the company – and its shareholders.”
Ashworth does not own any Monaco or Fleetwood stock.