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RV Shipments Keep Sliding

This cannot be a good sign for the economy:

The RV Industry Association’s April survey of manufacturers found that total RV shipments ended the month with 40,243 wholesale shipments, a decrease of 15.2 percent from the 47,442 units shipped last April.

All categories of towables and motorhomes were down for the month.

Towable RVs, led by conventional travel trailers, totaled 35,718 units for the month, a decrease of 13.7 percent compared to last April’s total of 41,411 units. Motorhomes finished the month with 4,525 units, down 25 percent compared to the April 2018 total of 6,031 units.

Through April, RV shipments have reached 140,219 units, down 24 percent from the 184,528 units at this point last year.

RV shipments are typically a leading indicator of a pending recession. Best to avoid investing in companies like Thor (52-week high of $110 and trading now at $56), Camping World (52-week high of $27 and trading now at $11) and those companies that are heavily exposed to the RV industry.

From the Atlantic:

RV sales turn out to be a pretty good predictor too: When RV sales are doing well, the economy follows; when RV sales tank, the economy is soon to tank too… The RV industry has repeatedly fallen in advance of more widespread economic troubles.

Everything’s Coming Up Daisies

Research and Markets, claiming to be the world’s largest market research store, has just released their report on the Recreational Vehicle market in North America. Their analysts forecast a pretty substantial rate of growth between 2018 and 2022 for the RV industry, a compound annual growth rate of just over 8 percent.

I did not have a chance to read the report because they want to charge me $2,500 for a single user electronic version. I did, however, get their overall message of continued growth.

The report covers the following companies:

  • Camping World Holdings
  • Forest River
  • Gulf Stream Coach
  • Northwood Manufacturing
  • REV Group
  • Thor Industries
  • Winnebago Industries

Several of them are private. Of the ones that are publicly traded, this is what their stock prices have been doing over the past five years.

Camping World is a leading outdoor and retailer and includes brands like Good Sam.

REV Group is recently listed and not without some controversy. REV Group builds American Coach, Monaco, Holiday Rambler and Fleetwood.

In June of this year, Johnson Fistel launched an investigation into potential violations of federal securities laws by REV Group to determine if the firm issued misleading business information to investors.

I’ve written about Thor before as they are a powerhouse company in the RV world. They cover a lot of brands including Airstream, Bison, CrossRoads, Cruiser, DRV, Dutchmen, Entegra, Heartland RV, Highland Ridge, Jayco, Keystone RV, K-Z, Redwood RV, Starcraft RV, Thor Motor Coach and Venture RV.

And the last publicly traded company highlighted in the report is Winnebago. I’ve written about them here when they recently acquired a boat company.

How do these companies stock prices line up against the S&P? For the most part, pretty closely:

Perhaps the RV industry will continue to grow at 8 percent CAGR from 2018-2022. As an investor, I hope that S&P 500 also continues its bull run for the next 5 years, particularly at the start of our retirement.

However, it has been a very long bull run. Including dividends, the S&P 500 has returned about 25% annually since March of 2009. Whenever this bull ends and the markets go down, sales of RVs may not continue to come up like daisies.