Here’s One Stock Wall Street Has Dead Wrong
Back on July 13, I wrote a Trade of the Day article called “Camping Stocks Could Give Post-COVID Wins.”
For a quick review, here’s what I said…
As the pandemic has taken people off hotels and planes, the result is that socially distanced outdoor holidays are enjoying a major popularity surge – lead by camping and “glamping” (a higher-end camping experience).
Some campsites are reporting a 400% spike in business, which makes the case for an increase in sales of tents, sleeping bags, camping furniture and cooking equipment.
And since the bulk of the demographic is coming from growth among families and 21- to 29-year-olds, this makes a case for a “cool” and on-brand company like Yeti (NYSE: YETI).
Yes, my recommendation was Yeti.
It traded around $39.50 at the time of my pick.
And this past week, it poked above $55.
That’s another 39% gain – off a free Trade of the Day stock pick – in one month.
So let me ask you…
Do you want more picks like this?
Uh… yes, please!
Then let’s stay on this camping and outdoor theme because there’s a company I believe Wall Street got wrong. And today it’s worth owning.
After all, the statistics that support outdoor living and recreation remain on your side…
According to the U.S. Centers for Disease Control and Prevention, outdoor activities are less risky than indoor ones, and clearly many people are tired of being cooped up at home.
As a result, outdoor recreation stocks are seeing record demand.
- RV maker Thor Industries cited an “influx” of first-time buyers.
- Camping World said that demand had remained strong through the summer months and the company might be on track for its most profitable year ever.
- And our play on Yeti just posted an 18% increase in second quarter sales for the division that includes its luxury coolers, waterproof backpacks and fancy camping chairs.
But let’s go back to Camping World (NYSE: CWH) for a moment…
On August 6, it reported a record second quarter net income of $1.62 per share, which blew away the FactSet estimate of $0.57.
And in response to this blowout quarter, shares of Camping World fell?!?
It seems counterintuitive, but Camping World sold off on the news. You see, going into the report, shares were up 187% this year, which blew away the S&P 500’s year-to-date gain of just 2.3%.
Quite simply, it was a “sell on news” event – and investors locked in their profits.
But now this sell-off has taken Camping World down to a logical reentry point.
Action Plan: The outdoor trend isn’t going away anytime soon. The pullback from $40 down to $33 is buyable – and it looks like a gift. Sales are on fire, so the time to add shares of Camping World to your ledger is now.
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