In a recent survey, the US Travel Association (USTA) shows that over 60% of folks in the US alone are eager for travel and leisure. This is up from 54% just one month ago.
But there is a big problem.
Who is going to want to get on a plane unless that absolutely need to? And trains? Not unless it’s vital for life and limb. So, we are stuck with just our cars.
Hotels and resorts have always been Petri dishes for all sorts of germs. But nothing like COVID-19. So, getting away and staying somewhere just isn’t going to work for a while.
I’ve been thinking and working on this problem for my Profitable Investing subscribers, and I have found the companies that are providing the solution to that pent-up wanderlust.
Over the next two days, I’ll tell you about which stocks you can use to take advantage of the situation.
Outdoor Pursuits for Profits
Recreational vehicles (RVs), including motorhomes and travel trailers, provide the perfect way to get out, get away and stay somewhere else safely.
RVs are just as clean as you keep your home. No one has to get inside besides you. They make for a perfect travel vehicle with a place to cook, sleep and stay.
And thanks to the lockdowns, state and national parks have a lot less traffic in them than in years past. More modern RVs even have the capability to be off-grid and carry more water and fuel. They’ve also got solar power, and 4G and coming 5G evolutions provide communications and streaming entertainment.
Now, these come in various levels of cost, but none are really cheap. So, with all of the unemployment, who is going to be able to buy these?
Well, millions more are still thankfully employed, and others are retired. And with savings and bank deposits bulging quickly over the past few months, there is cash out there to buy these get-away vehicles.
Thor Industries (NYSE:THO) is primarily focused on North America and builds and sells motorhomes, trailers and related accessories and parts. Its brands are well-known to those that research the RV market, including Airstream, Heartland, Jayco, Starcraft and many others.
The company’s sales were trailing off from late 2016 through the first quarter of 2019. But the last four quarters have seen improvements. And this really showed up with a surge of sales for the first quarter, bringing the level back up nearly to recent highs last seen in 2016. I believe the company will see further improvement in the current and pending quarters.
The company has thinner margins like for many vehicle-makers. But it runs a tighter ship as a company, with a return on equity running at 9.5%. It has a good cash surplus compared to liabilities exceeding 40%. And while public, it has a private company level of debt, as management has been conservative. Debt to assets is only around 33%.
Weekly Chart of Thor Industries (THO) — Chart Source: TradingView
It also pays a dividend, yielding just under 1.5%. And even as the stock is getting noticed as a problem-solution company, I’m still recommending it as a buy in my Profitable Investing service.
THO is a great buy for the new normal.
Neil George was once an all-star bond trader, but now he works morning and night to steer readers away from traps — and into safe, top-performing income investments. Neil’s new income program is a cash-generating machine…one that can help you collect $208 every day the market’s open. Neil does not have any holdings in the securities mentioned above.