Please ensure Javascript is enabled for purposes of website accessibility

Why Thor Industries Soared 80% in 2016

By Daniel Miller – Feb 13, 2017 at 11:43AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares of the recreational vehicle maker benefited from record operating results, a major acquisition, and a broader stock market rise after Donald Trump was elected president.

What happened

Shareholders of Thor Industries (THO 5.06%), one of the world's largest recreational-vehicle (RV) manufacturers, were rewarded as the company's stock soared 80% in 2016 after improved top- and bottom-line results and a major acquisition.

A Jayco trailer

Image source: Thor.

So what

There were a couple of driving factors behind Thor's strong year. During the summer, Thor announced it would be acquiring Jayco Corp. for roughly $576 million, a transaction that brought in a portfolio of complementary products such as travel trailers, folding camping trailers, and high-end diesel Class A motorhomes. The acquisition will certainly move the needle for Thor's top and bottom lines, as you can see below.

Jayco will add $1.4 billion revenue to Thor's top line.

Image source: Thor Industries' Jayco acquisition presentation from July 1, 2016. *As of calendar year 2015 for Jayco. **As of fiscal year 2015 for Thor, continuing operations. 

The other major driving force behind Thor's stock-price increase was record business results. Thor posted record sales and bottom-line results in both of its most recent quarters.

During fiscal 2017's first quarter, Thor's top line checked in at $1.71 billion, which was far ahead of analysts' estimates, which called for $1.5 billion. The story was the same for its earnings per share, which checked in at $1.49 per share, far higher than analysts' estimates of $1.23 per share.

Now what

"Fiscal 2017 began like fiscal 2016 ended, with continued robust performance throughout the Company. The strong revenue and earnings growth reflects the ongoing enthusiastic reception of our product offerings by dealers and consumers alike, as well as our ability to effectively manage our growth and integrate acquisitions successfully," said Thor President and CEO Bob Martin in the earnings press release.

Investors should expect another strong year for the RV manufacturer considering its new products from the acquisition as well as today's conditions of cheap gas and an improving economy.

Daniel Miller has no position in any stocks mentioned. The Motley Fool recommends Thor Industries. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Thor Industries, Inc. Stock Quote
Thor Industries, Inc.
THO
$73.25 (5.06%) $3.53

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
331%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.