BRP INC. (DOO-T)

Trades at 8x PE vs. peers at 12x. They mostly beat their last quarter, generate free cash, take more market share and enjoy robust demand for snowmobiles. A caveat is that in a downturn, discretionary costs like this will be cut.

It held up well during the downturn and is therefore resilient. It has rallied and maintained at these higher levels. The consumer goods sector and leisure products are doing well.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Strong player in sports vehicle market. Managed costs very well during COVID. Main risk is reduced consumer spending. Shares are fairly priced with upside potential.

3-5 year hold? An innovative company that captivates its customers. On a 12-month trailing basis is earning 2x what its normalized earnings power is. They sell jet skis and other expensive toys that people bought during the pandemic, and you won't need to replace those anytime soon. It was a 6-bagger during Covid, but has since come off 28%. This will likely grind lower lower before it resumes its uptrend. Still not cheap and expectations are still too high. If you hold this for 3-5 years it's probably okay, but not for him.

They make snowmobiles and enjoyed a surge during Covid, but a correction since as people are travelling. DOO is cyclical and shares are near the bottom of the cycle now. A best in class company. You can start nibbling at this.

High priced items are not good in a slowing economy. Consumer toys not needed during tough economic times. Wait to see how economy recovers before buying this type of stock.

It benefited from staycations during the pandemic. The stock has rebounded lately. It will be cyclical, so beware if there is a recession. Until then, demand for snowmobiles has remained strong which bodes well for DOO.

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. There is no news to account for the weakness. The stock rose last week and has essentially returned to those levels. Estimates have risen, which pushes expectations to beat on earnings. The company has beaten estimates 8 quarters in a row. Unlock Premium - Try 5i Free

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. EPS beat estimates at $2.53.EBITDA rose to $375M. Revenue growth guidance was also raised from 27% to 35% compared to 25%-30% before. Results look solid. Good entry point around $93. Unlock Premium - Try 5i Free