Monday, October 11, 2010

Going Mobile Stock Picks

Recreational Vehicles
This week I’ve got a buy and sell in the recreational vehicle industry.

"I'm goin' home
And when I wanna go home
I'm goin' mobile
Well, I'm gonna find a home
on wheels, see how it feels
Goin' mobile
Keep me movin'"

The Who

An RV is the ultimate in land-based four-wheel long-term travel-trip comfort. Now the tow behind mobile home has top demand for going mobile. Think about that for a minute. Why is that so? Read more below . . .

RV Deliveries

RV manufacturer’s deliveries to dealers crashed 2008 and 2009 with the real estate and stock market. RV deliveries this year have rebounded pretty good since then, but are still well below the peak in 2006 by almost 60%. Higher priced motor homes in 2006 made about 14 percent of all recreational vehicles manufactured. That share decreased to less than 10 percent currently.

RV Deliveries Rebounded Because of the Banks Not Demand

The modest rebound is more attributed to banks loaning out again on RV’s, not a big pickup in demand from consumers. Maybe they see more people living in RV’s and mobile homes while the real estate market still works through the foreclosures and over-built inventory?

Going Towable Mobile

Demand for RV’s rose last quarter by about 10% with towable RV’s increasing to almost 20%. Are these figures possibly indicating that people in transition are buying towable mobile homes to go find a new life in a new place in a new job? You lose your job, and you lose your house? You buy a towable RV, pack your stuff in it, and go? Park the towable RV, then go look for a new job, and a new life? If so, will this trend continue?

My Stock Picks This Week

Buy on Thor Industries – Ticker THO, and a sell on Winebago Industries – Ticker WGO. Thor makes a full multi-line of RV's and is now paying out $0.10 a share dividend to its investors every three months, which is a big 43% payout increase. That's a significant move, and Thor's largest competitor Winebago doesn’t even pay a dividend at all.

Winnebago Industries Announces Fourth Quarter and Fiscal 2010 Financial Results Conference Call to Be Held on October 14, 2010

Sell Winebago Industries – Ticker WGO

Sell Entry: 10.96 to 10.26

Stop-Loss: 11.21

Take Profit Areas: 8.34 to 8.04, 7.71 to 7.42,

Winnebago Company Profile

Winnebago Industries, Inc. manufactures motor homes, which are self-contained recreation vehicles used primarily in leisure travel and outdoor recreation activities. It manufactures conventional motor homes constructed directly on medium-duty and heavy-duty truck chassis, as well as mini motor homes built on van-type chassis with gas and diesel engines. The company’s motor homes provide living accommodations for approximately seven persons and include kitchen, dining, sleeping, and bath areas, as well as a lounge; and optional equipment accessories, such as generators, home theater systems, king-size beds, leather upholstery, and interior equipment. Winnebago Industries also manufactures and sells original equipment manufacturing parts, including extruded aluminum and other component products for other manufacturers and commercial vehicles. It markets its motor homes through independent dealers under the Winnebago, Itasca, and ERA brand names in the United States and Canada. The company was founded in 1958 and is headquartered in Forest City, Iowa.

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Click the Winebago Industries stock chart below for a larger view.

Winnebago Stock Chart