Please ensure Javascript is enabled for purposes of website accessibility

Why Camping World Holdings Stock Popped 17.1% in September

By Steve Symington - Oct 5, 2019 at 4:39PM

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

The RV retailer is refocusing on its core business.

What happened

Shares of Camping World Holdings (CWH -1.64%) climbed 17.1% in September, according to data from S&P Global Market Intelligence, after the recreational vehicle retailer announced an expanded dealer network and a notable change in its retail strategy.

Of course, it helped that Camping World stock entered last month hovering near its lowest level since going public in late 2016 -- a consequence of few signs of improvement in the sluggish RV market and, in turn, the company's disappointing second-quarter report in August.

Camping World location with RV parked out front and colorful flower beds.

IMAGE SOURCE: CAMPING WORLD HOLDINGS.

So what

More specifically, Camping World shares began to rally early last month, when management announced a new plan "to strategically shift away from locations where the company does not have the ability or where it is not feasible to sell and/or service RVs."

"We believe the sales and/or servicing of recreational vehicles is our core and most important offering, and with the RV and outdoor consumer crossover, we believe there is an opportunity to continue growing our market share and improve our financial performance through the operation of locations with RV sales and/or service and, when feasible, our hunting, fishing, and camping products," said Camping World CEO Marcus Lemonis.

As it stands, Camping World operates 165 locations that sell and/or service RVs, and 37 locations that don't -- with the latter category focusing primarily on selling Camping World's various non-core outdoor lifestyle products. Still, while Camping World is attempting to obtain the necessary developmental approvals to sell and service RVs at those locations, it anticipates closing, relocating, or repurposing at least 27 stores when all is said and done.

Now what

Camping World also plans to continue opening new RV dealerships and making additional strategic dealer acquisitions as opportunities present themselves. Coupled with the company's renewed focus on its core RV sales and service business, that should leave Camping World better positioned to continue dominating this niche.

Until the RV sales market shows more tangible signs of sustained improvement, however, I suspect the upside to buying or holding Camping World stock today remains limited. And I'm content continuing to watch this story play out from the sidelines.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends Camping World Holdings. 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

Camping World Holdings, Inc. Stock Quote
Camping World Holdings, Inc.
CWH
$31.29 (-1.64%) $0.52

*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
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/16/2022.

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.