Volatile, but hugely profitable for investors whose timing was right: Perhaps, that is the best way to describe 2003 for people who invested in RV company stocks.
As anyone who has endured a finance course knows, stock prices are supposed to represent a company’s future profitability. And at the beginning of last year, when the U.S. was preparing for war in Iraq, there was good reason to be gloomy about the outlook for RV company profits.
Consequently, the prices of almost all RV company stocks went on a steady decline from the beginning of 2003 until the military conflict in Iraq began in March. Most RV company stock prices reached their low points for the year that month.
Fortunately, the conflict in Iraq did not turn out as badly as most had feared so investors began taking a more upbeat attitude towards RV company profits in the spring. And increasing numbers began bidding up the prices as evidence mounted that low interest rates were encouraging more people, including among the millions of Baby Boomers who were entering their prime RV-buying years, to make RV purchases.
Several RV firms helped to reinforce the optimistic views by posting record quarterly sales and earnings during the second half of last year, which helped push their stock prices to new 52-week highs as 2003 drew to a close.
Investors in Thor Industries Inc., Winnebago Industries Inc. and Fleetwood Enterprises Inc. had the most to celebrate if they bought those companies’ stocks during March and sold at peak levels.
For example, those who bought Winnebago stock in March at its 52-week low of $23.31 a share would have tripled ther money if they sold on Dec. 22, when it climbed as high as $71.00.
In the case of Thor, investors buying at its 52-week low of $21.45 in March also would have tripled their money had they sold when it reached its high of $66.55 in early November.
Meanwhile, many investors view Fleetwood as being more risky than Thor or Winnebago because the company also is a major manufactured housing producer and that industry has been in a deep recession the last few years. But those who were able to tolerate the risk and who bought Fleetwood stock in March, when it was near its low for the year of $3.06 a share, would have almost gained more than three and a half times their investment if they had sold around the time Fleetwood stock reached its 52-week high of $11.61 a share in September.
Investors in Coast Distribution System Inc., which serves the RV and pleasure boat industries, also would have quadrupled their money if they had bought the company’s stock, which languished as low as $1.65 a share from the beginning of 2003 until early April, and sold in the late October-early November time frame, when Coast stock reached its high for the year of $6.85.