By Elyse Andrews, Editor of Cabot Wealth Advisory
From Cabot Wealth Advisory 1/29/11 Sign up for free Cabot Wealth Advisory e-newsletter
Winnebago (WGO) recently appeared in Cabot Top Ten Weekly. Here’s what Editor Mike Cintolo wrote:
“Americans love the open road and as the leading maker of motor homes with over 18% market share, Winnebago is synonymous with seeing the sites in style. Motor homes aren’t cheap, rivaling the cost of real homes in some cases, so the recession hurt 2009 results as consumers hesitated on big purchases. But motor homes are now seeing resurgent interest, so the rebound of sales in 2010 to $450 million from $212 million in 2009 was no fluke. That also means dealers have worked through the inventory they sat on and now need new homes to showcase on their lots. Inventory was still near historic lows last year at 2,044 homes, well below the 3,500-plus that was typical during the past decade. Expectations are also rising because Baby Boomers are projected to be significant motor home buyers as they enter retirement. On top of that, existing owners tend to trade in or up to a new motor home every five to seven years, meaning buyers from the industry’s sales peak of 2004 are now kicking the tires on possible upgrades.”
“Buyers piled into WGO in mid-December as the company announced profit that topped Wall Street expectations and gave indications dealers were optimistic enough to start stocking more motor homes on their lots. The surge, from 10 to 15, broke shares out of trading range without drawing in much selling. The next level to break is 17; shares appear to be consolidating for a run there soon. Long-term, shares tend to be more volatile, trading in response to broader economic conditions that imply consumer discretionary spending may be rising or slowing.”
Mike recommends buying WGO between 14 and 16 to minimize risk, so keep that in mind if you take a position.
For more on WGO and other leading stocks, check out Cabot Top Ten Weekly, where Mike Cintolo brings you the market’s hottest stocks each and every week. Click here to learn more.
Editor of Cabot Wealth Advisory
Elyse Andrews edits Cabot Wealth Advisory, a free email newsletter that offers independent, no-nonsense investment advice on how to build long-lasting wealth written by Cabot’s analysts and editors. Every Saturday, Elyse writes the Weekend Digest, which includes her column and a summary of Cabot Wealth Advisories that readers may have missed during the week. Elyse is also a regular contributor to The Iconoclast Investor, a blog for Cabot editors and readers to share their views and interact with each other.