The solid financial performance was the result of the marketplace’s positive response to the company’s new 2014 motorhome and towable products, such as the new Winnebago Industries, Inc. (NYSE:WGO) Forza and Itasca Solei. The company is small, but its motorhomes have a great reputation in the market. Winnebago Industries, Inc. (NYSE:WGO) investors will continue to benefit from its focus on its popular motorhome vehicles.
Diversified growth for Polaris Industries Inc. (NYSE:PII)
Polaris Industries Inc. (NYSE:PII) is a diversified company that targets off-road vehicle, snow mobile and on-road vehicle markets in the United States, Canada and internationally. The company also manufactures spare parts for its products such as winches, plows, racks, tires, mowers etc. With the acquisition of Aixam Mega S.A.S, the company has further diversified its product offerings and is now able to sell mini trucks and quadricycles (mini cars). In addition to its vehicle business, the company sells recreational apparel to complement its products.
For the year ended 2012, the total sales of the company increased by 21% on a yearly basis. The management of the company expects sales for the year 2013 to increase by 12-15%. The company reported solid cash reserves with no net debt in its balance sheet. All of the company’s products have gained market share in the 1Q13.
The greatest increase in sales in 2013 is expected to come from the Commercial Vehicles segment, launched in March this year. These commercial vehicles are available in multiple model configurations, with special features such as hydraulics, attachments, and power take-offs. The initial reception of these vehicles has been positive, and I expect this segment to become a major revenue contributor to the company.
My takeaway
The economic recovery is fueling growth across many industries, and the recreational vehicle industry has shown impressive growth in recent quarters. An increase in consumer confidence and vacation-related activities is spurring growth for this industry. I believe the time is right for investing in the three companies I have analyzed above.
Awais Iqbal has no position in any stocks mentioned. The Motley Fool recommends Polaris Industries. The Motley Fool owns shares of Winnebago Industries. Awais is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article Strong Growth Outlook for Recreational Vehicle Companies originally appeared on Fool.com is written by Awais Iqbal.
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