- CWH has benefited from the boom in the RV industry. It posted record earnings in 2021, but the stock has lost more than 25% in 1 year.
- Its continued strong focus on used RVs bodes well for revenue growth given the stronger sales momentum for pre-owned RVs vs. new ones.
- CWH’s scale and brand equity strengthen its competitive advantage. The business has also enjoyed improved margins and returned capital to shareholders generously.
- At current multiples, which are 60% off the sector median and its 5 year average, the stock seems to be setting up for a monster rally with the possibility of a short squeeze given 40% of shares are held short.
- However, the risk of recession, the huge inventory on its books, and the rapid uptake of debt in an environment of increasing interest rates are risks that investors should watch closely.
For further details see:
Camping World: Setting Up For A Monster Rally But Beware Of Risks