Consumers have found that Camping World (NYSE: CWH), a distributor of camping supplies and recreational vehicles (RVs), has been a direct beneficiary of the pandemic.
Camping World (NYSE: CWH), a distributor of camping products and recreational vehicles (RVs), has been a direct beneficiary of the pandemic as consumers discover or rediscover outdoor recreation. The lifting of COVID restrictions and the spread of vaccinations have not stopped Camping World from growing. Investors are wondering if there is a new normal in the industry. In terms of valuation, if forecasts aren't downgraded, the stock trades very cheaply at 5.3 times forward earnings and pays an 8.75% annual dividend. In fact, it's valued at less than RV maker Winnebago (NYSE: WGO)'s 4.1 times forward earnings and 1.9% annualized dividend yield, or Thor Industries (NYSE: THO) 9x expected earnings. .2x and 2.3x forward earnings. Annual dividend income.
The Fed has raised interest rates by 3% over the past six months in an effort to curb runaway inflation. Results were slow to materialize, however, as the headline consumer price index came in at 8.2% in September, below analysts' expectations of 8.1% but still above the June high of 9.1%. A drop in industry RV shipments in August (-36%) may signal a decline in Camping World campervan sales. The potential for normalization and slowdown in sales to be reported in the next income statement should make investors consider buying the stock. The RV business has been on a tear since the pandemic lockdown, which seems challenging as potential consumer lifestyle changes continue to drive demand. However, rising interest rates and reduced consumer discretionary spending could weigh on demand, and investors should brace for potential shortages. Auto inventories more than doubled year-on-year, signaling an easing of supply chain constraints.