Thor (THO) Says Someone is Buying RVs, But Not Everyone Agrees...
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Thor Industries (NYSE: THO) is lower Monday as Barron's raised a key question about the company over the weekend: who's buying all those RVs?
It's no secret that more-and-more baby boomers are hitting retirement age and many see an RV as the perfect gift to themselves to go out and see the U.S. Unfortunately, not every retiree has the wherewithal for such an undertaking.
Barron's quoted Off WallStreet Consulting's Mark Roberts in questioning the ever expanding gap between dealer shipments and retail sales of RVs. Roberts noted that shipments of RV trailers to dealers have been "running ahead" of sales for over two years. (Thor gets about 70 percent of sales from trailer sales.) Roberts wasn't sure if this was Thor-specific or an industry-wide issue.
Roberts noted that Thor's most recent quarter had a 30 percent jump in sales, though pricing was flat. This might indicate that Thor is already "stealing" next years sales.
The RV industry has consolidated over the last few years as the 2008 financial fallout put the kibosh on many retirees plans. Thor's ability to cut costs and right-size dealerships had proved golden. Revs rose 21 percent in FY11, and 12 percent in FY12.
And there really are only three main competitors in the industry, Barron's noted. Thor, Berkshire Hathaway's (NYSE: BRK-A)(NYSE: BRK-B) Forest River, and Jayco.
Shares of Thor are currently trading for about 17 times earnings.
Barron's cautions, however, that wholesale and retail data don't necessarily line up. Roberts generally uses trailing 12-month numbers and boosts Statistical Survey's (SSI) retail numbers for better comparison. After adjustment, wholesale shipments are up 11.5 percent this year while retail shipments are 7.2 percent higher.
Though valuation for Thor is fair right now, investors might need to get "on the road again" if signs of weakness pop up. Thor is down 2.1 percent Monday morning.
It's no secret that more-and-more baby boomers are hitting retirement age and many see an RV as the perfect gift to themselves to go out and see the U.S. Unfortunately, not every retiree has the wherewithal for such an undertaking.
Barron's quoted Off WallStreet Consulting's Mark Roberts in questioning the ever expanding gap between dealer shipments and retail sales of RVs. Roberts noted that shipments of RV trailers to dealers have been "running ahead" of sales for over two years. (Thor gets about 70 percent of sales from trailer sales.) Roberts wasn't sure if this was Thor-specific or an industry-wide issue.
Roberts noted that Thor's most recent quarter had a 30 percent jump in sales, though pricing was flat. This might indicate that Thor is already "stealing" next years sales.
The RV industry has consolidated over the last few years as the 2008 financial fallout put the kibosh on many retirees plans. Thor's ability to cut costs and right-size dealerships had proved golden. Revs rose 21 percent in FY11, and 12 percent in FY12.
And there really are only three main competitors in the industry, Barron's noted. Thor, Berkshire Hathaway's (NYSE: BRK-A)(NYSE: BRK-B) Forest River, and Jayco.
Shares of Thor are currently trading for about 17 times earnings.
Barron's cautions, however, that wholesale and retail data don't necessarily line up. Roberts generally uses trailing 12-month numbers and boosts Statistical Survey's (SSI) retail numbers for better comparison. After adjustment, wholesale shipments are up 11.5 percent this year while retail shipments are 7.2 percent higher.
Though valuation for Thor is fair right now, investors might need to get "on the road again" if signs of weakness pop up. Thor is down 2.1 percent Monday morning.
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