Winter Stocks to Buy, First Runner-Up: BRP Inc. (BRPIF)
There are three major players in the snowmobile business: Polaris Industries (PII), Arctic Cat (ACAT) and BRP Inc. (BRPIF), the parent of Ski-Doo. In my article about the best leisure-related stocks I favor ACAT stock over PII because it has been beaten down mercilessly in recent weeks as a result of a big earnings miss.
If you’ve followed these companies for any length of time, you know their stocks can be extremely volatile at times. That’s just the way it is; it’s never going to change. Both are great stocks to buy. Just remember to be buying when everyone else is selling.
However, because we’re focusing on wintry stocks I’m going to recommend BRPIF stock for the simple reason that Ski-Doo is the No. 1 snowmobile brand in the world. However, it’s not just about market share. In December, BRP delivered a 39% increase in third-quarter revenue from its seasonal products which include snowmobiles and personal water craft. On the bottom line, normalized EBITDA increased 42% year-over-year to C$119 million.
In terms of valuation, its enterprise value is 10.7 times EBITDA, smack dab in the middle between PII at 13.6 and ACAT at 7.9. If valuation and safety are of equal importance than BRPIF stock is one of the best winter stocks to buy.