According to the Recreational Vehicle Industry Association (the “RVIA”), the 2017 retail value of the RV industry is $20 billion. Since 1997, the industry has grown at a compounded rate of 5.5%, according to a report by Seeking Alpha.
That brings us to a battered-but-not-beaten Camping World Holdings (CWH), a stock that at the beginning of the year traded near all-time highs of $48, but then proceeded to shave over 60% of its value in just two quarters. While in the short term CWH has a gloomy outlook, over the long term the company should demonstrate both business growth and share price appreciation.
There are four parts to the thesis that show us why. First, while investors are not wholly convinced that CEO Marcus Lemonis can run the show – both figuratively and literally – with CWH and his more well-known TV venture, The Profit, management will be able to execute on a growth strategy through acquisition, vertical integration, and the Good Sam subscription service. Second, even though tariffs have dampened the RV outlook as a whole, and accounting concerns at CWH have magnified poor performance, these are surmountable speed bumps on the road to long-term profitability.
Third, despite the Gander Mountain acquisition hindering earnings guidance, management is just now cracking the shell of its potential to expand the company’s reach. Finally, while there are good businesses out there like Winnebago Industries Inc. and Thor Industries Inc., it turns out that CWH — despite near-term execution concerns — carries the best competitive growth prospects for the price. All told, Camping World is a durable business that can achieve secular growth, with the advantage of being the largest RV dealership in the nation.
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