The Recent Share Price Decline Creates a Buying Opportunity
- Backlog on January 31, 2017 was up 89% YoY (or 39% organically when excluding Jayco) to over $2 billion, auguring well for continued EPS growth.
- Shares are off 17% from March 3, 2017 high of $115, despite EPS projected to rise 31% in FY17 (July) to a record $6.40 and 16% in FY18 to $7.44, aided by vibrant market conditions and contributions from Jayco.
- With the June 2016 purchase of Jayco for $576 million, Thor is now the clear market leader with an approximate 47% share (vs #2 Forest River at 35%) in an RV industry seeing new life from younger/first-time buyers and demand for entry-level (low ASP) units.
- Thor has compounded its regular dividend at a 17% CAGR over the past five years, even excluding special payments in November 2013 and 2012.
Thor Industries is a manufacturer of recreational vehicles. The company has three segments: North American Towable Recreational Vehicles, which consists of: Airstream (towable), Heartland (including Bison, Cruiser RV and DRV), Jayco (including Jayco towable, Starcraft and Highland Ridge), Keystone (including CrossRoads and Dutchmen) and KZ (including Venture RV); North American Motorized Recreational Vehicle, which consists of: Airstream (motorized), Jayco (including Jayco motorized and Entegra Coach) and Thor Motor Coach; and European Recreational Vehicles, which consists of the Erwin Hymer Group business.
Great Lakes Review is located in Cleveland, Ohio, was founded in 1981 and became a division of Wellington Shields & Co. LLC in 2011. Great Lakes Review is a research boutique focused on the fundamentally-oriented investor seeking companies that dominate their respective specialty niche regardless of industry. The objective is to make money for the long-term by gradually accumulating a diversified portfolio from a universe of no more than 30 companies. Although short-term-oriented accounts will be alerted to trading opportunities, aggressive sell recommendations are triggered only by a deterioration in long-term fundamentals, not by short-term blips or investor fancy. Coverage of those names that lose their earnings momentum or earnings predictability may be dropped and replaced with more vital candidates.
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