What happened

Shares of Camping World Holdings (CWH 1.65%) traded up more than 9% on Tuesday. This came after the recreational-vehicle retailer's celebrity CEO disclosed he had added to his holdings in the company, joining one of the company's largest shareholders in adding to their positions.

So what

Camping World shares have hit numerous speed bumps over the past year. The most recent was last week, when the shares fell more than 14%, after the company reported first-quarter earnings that were well short of expectations. The poor quarter caused at least one Wall Street analyst to throw in the towel: Bank of America Merrill Lynch analyst John Lovallo downgraded Camping World to underperform from neutral, and lowered his price target for the shares to $13 from $15.

An RV set up for camping at a picturesque mountain lake

Image source: Getty Images.

In a regulatory filing Monday, Abrams Capital disclosed it had paid $282,500 for 25,723 shares following the sell-off, raising its ownership position to 13.12% of the company's shares outstanding. And on Tuesday Barron's reported that Camping World chairman and CEO Marcus Lemonis, a private-equity veteran who's perhaps best known as the host of CNBC's The Profit, paid $1.12 million for 100,000 shares.

Lemonis, who controls 52% of Camping World's votes through supervoting shares, told Barron's he bought the stock as soon as he could following a 48-hour post-earnings waiting period. He said the stock was down because investors might not fully appreciate the cyclical nature of the RV business, but said "I'm not alarmed."

Now what

The show of confidence is great, but Lemonis was careful not to predict the timing of a turnaround. BofA's Lovallo, in his downgrade, said he believes the company is being overly optimistic about how 2019 will go, and predicted Camping World will have to bring down estimates as the year goes on.

It's good to see insiders doubling down instead of running for the exits, and the move should ease any concerns of existing stockholders. But Lemonis is correct in saying that the RV business is a cyclical one. Until there is an indication that the industry is in growth mode again, I don't see much reason to join him in buying in.