Even when your company name is culturally synonymous with your product -- think Kleenex, Google, or Xerox -- your business may not always come up roses. The recreational vehicle market, for example, has its fair share of ups and downs. But it was looking up for Winnebago (NYSE:WGO) last quarter, thanks in large measure to its acquisition of Grand Design RV a few years ago and its Chris-Craft purchase more recently.

In this segment of the Market Foolery podcast, host Chris Hill and MFAM Funds' Bill Barker talk about where the growth lies in the RV markets, how Winnebago stacks up against rivals like Thor Industries (NYSE:THO) and Berkshire-Hathaway's Forest River, why the current weak sales numbers look a lot better in context, and more.

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. A full transcript follows the video.

This video was recorded on June 19, 2019.

Chris Hill: Let's move on to Winnebago. Third-quarter report seemed to be a little bit of a mixed bag, although the profit margins appear to be improving for Winnebago. Typically when we talk about the RV industry, more often than not, you and I are talking about Thor Industries, not Winnebago. But Winnebago seems to be doing a pretty nice job of late.

Bill Barker: Yeah, Winnebago, which is the name that people know best for RVs and is best known for the motor homes portion of the business. The towable side of the business is larger for the industry than the motor homes. Motor home is the large vehicle, bus-like structure, where the housing unit is all part of the motor vehicle and then the towable is where you hitch something onto the back of your vehicle. Winnebago made a good acquisition a couple of years ago, Grand Design, which is a fast growing towable. Winnebago really didn't have much going on prior to that in the towable space. As that part of the industry has been growing, Winnebago is now an active participant in that growth and actually capturing market share in large part from Thor. You've got Thor, which is the largest RV maker. Just made a major acquisition in Europe, which closed last quarter. Then you've got Forest River, which is owned by Berkshire Hathaway. Those two are far larger than Winnebago, which has now grown to about 10% of the market. And then there are a few scattered players that are not especially meaningful beyond that.

Winnebago also has done what a lot of players in the industry are doing, which is diversifying into the marine segment. They acquired Chris-Craft, which is probably known to many as a designer of beautiful wooden boats that are timeless and elegant. A good thing to do is to have some diversification, because the RV industry ran into a lot of trouble last year when dealers overstocked early in 2018, and a year later, they're still working down the overstocking. Winnebago's numbers on their face are not great, but they are pointing to some brighter days ahead, as everybody in the RV space has been doing for a while.

Hill: The acquisition that Thor made that you mentioned in Europe, is that a diversification play? Or is there some RV maker in Europe? In large part because of where I live, when I think of RVs, I just think of RVs here in America. I don't necessarily think of Europe as necessarily a big market, but I'm happy to be proven wrong on that.

Barker: Well, they're more in the smaller vehicles and you see in the U.S. There are, in many parts of Europe, smaller roads, and not quite the car culture that we have. But they are a big camping culture. They're more camper-sized things. Yeah, there's a decent part of the market that you can capture there. It is a diversification thing for Thor. It's a good time to diversify, given the issues with the inventory for RVs here.

Getting back to Winnebago, they're pointing to, again, good growth in the towables from Grand Design. Motor homes sales were off about 30%-some year over year. A couple of years ago, that would have been disastrous for Winnebago, when they had not yet acquired a towable and a marine unit.

Hill: For as well known as the Winnebago brand is, this is not a big company. It's like $1.25 billion in market cap. But it's nice to see that they're both diversifying their revenue stream and because of that starting to improve their financial picture.

Barker: Yeah, they are, unlike Thor, trading reasonably close to their 52-week high. Not right at the 52-week high, but they're not a long ways off. Thor's still basically cut in half from where it was about 18 months ago.