Shares of several recreational vehicle makers shot higher on Tuesday (Sept. 2) as crude prices tumbled after the Gulf Coast and its oil facilities appeared to be spared the worst from Hurricane Gustav.
“The good news is the oil patch appears safe and oil prices are coming down,” said Craig Kennison, analyst for R.W. Baird & Co.
Light, sweet crude oil for October delivery closed at $109.71 per barrel on the New York Mercantile Exchange, down $5.75, or 5%.
Shares of Thor Industries Inc. finished up $1.26, or 4.9%, to $24.10 and Winnebago Industries Inc. rose 68 cents, or 6%, to 12.03. Drew Industries Inc. ended the day up 34 cents, or 2%, to $16.36.
Bucking the trend, Fleetwood Enterprises Inc. slumped 21 cents, or 9.8% to close at $1.93. On Thursday, the Riverside, Calif., company posted a sharply wider first-quarter loss on weak RV sales.
Shares of RV companies have been battered recently – many are down more than 50% for the year – as high gasoline prices and weak consumer confidence cripple sales of the large, gas-guzzling vehicles.
Kennison said investors should not hold out hope that RV companies would get a boost following Hurricane Gustav, as many did after Hurricanes Katrina and Rita in 2005, when RV demand surged as many Gulf Coast sought temporary housing.
“In this situation, I don’t think we have a large number of displaced people, number one, and secondly I’m not sure that (the Federal Emergency Management Agency) would pursue the RV strategy as aggressively this time around,” Kennison said.