Opinions
Jim Cramer - Mad Money
Thor Industries, Inc.
THO-N
BUY
Sep 25, 2020
It sold off hard at the start of the pandemic because analysts predicted a recession and TVs don't sell. Though unemployment spiked, there was also a boom in RV sales because people can't travel in their vacations, so camping is the safest alternative. He predicts RV sales to continue strong.
$93.210
Stock price when the opinion was issued
Automotive
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Stockchase Research Editor: Michael O'Reilly Demand for RVs skyrocketed during the pandemic. Inventories continue to decline despite increased production to the point where order backlogs exceed $14 billion. It trades at 16x earnings, compared to peers at 23x. It pays a smallish dividend, but it is backed by a 35% payout ratio of cash flow. We would buy this with a stop loss at $90, looking to achieve $145 -- upside potential over 22%. Yield 1.42% (Analysts’ price target is $142.33)
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Covid winners are unfairly pigeonholed as reopening losers. This includes THO which makes RVs--their products are sold out for the rest of 2021, and yet shares have plummeted since the year started and despite reporting a strong last quarter with a big backlog. Sure, steel and aluminum costs have driven up the prices of their products. Maybe investors fear THO will suffer as hotels reopen. He disagrees--THO is still a buy.
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Stockchase Research Editor: Michael O'Reilly We reiterate THO, the world's largest manufacturer of recreational vehicles, as a TOP PICK. It is trading at good value at 10x earnings compared to peers at 20x. It pays a decent dividend (backed by a payout ratio under 40% of cashflow), which was just increased by 5% recently. We continue to recommend a stop at $90, looking to achieve $145 -- upside potential over 42%. Yield 1.65% (Analysts’ price target is $148.56)
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