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Why Camping World Holdings Stock Jumped Friday

By Daniel Sparks - Oct 11, 2019 at 6:07PM

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One large shareholder apparently thinks it's time to buy more stock in this outdoors retailer.

What happened

Shares of outdoor and camping retailer Camping World Holdings (CWH -1.64%) jumped 10.5% on Friday. The gain was likely due to investor optimism over Abrams Capital Management's significant purchase of the stock.

A chart showing a stock price moving higher

Image source: Getty Images.

So what

In a filing with the Securities and Exchange Commission, Camping World revealed that Abrams Capital had increased its stake in the company from about 5.5 million shares to 6.1 million. The increased stake cost Abrams Capital $5.2 million.

With Abrams now holding a 16% stake in the company, the large addition may be seen as a sign to investors that the company is doing well.

Now what

While it's good to see a large Camping World shareholder demonstrating confidence in the stock, investors should remain focused on the underlying business. Insider purchases don't automatically mean that the stock is set to perform well in the future.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool recommends Camping World Holdings. The Motley Fool has a disclosure policy.

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Camping World Holdings, Inc. Stock Quote
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