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Why Camping World Holdings Jumped 31.1% in January

By Rich Duprey - Feb 5, 2021 at 12:35PM

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The RV retailer exhibited similar drive all year long.

What happened

Shares of Camping World Holdings (CWH 0.74%) rose 31.1% in January, according to data provided by S&P Global Market Intelligence, building on the massive gains it made in 2020 as people sought out the great outdoors during the COVID-19 pandemic.

So what

Because we were supposed to keep our distance from others, there seemed to be no better way of doing so than hopping into a recreational vehicle and heading for the wilderness.

Smiling woman sitting in front of an RV.

Image source: Getty Images.

Consumers caused sales of RVs to jump 16% over the first nine months of the year, helping the RV dealer and lifestyle specialist turn a $39 million loss a year ago into a $304 million profit this time around.

Moreover, Camping World had fortuitously prepared for such an occasion when it acquired a number of businesses several years ago whose focus was more on sporting goods than simply RVs. As fitness and outdoor recreation were the watchwords of the Year of Lockdowns, the retailer had all its bases covered.

Now what

Camping World's stock continues to climb, yet shares trade at deeply discounted values. The RV leader goes for a fraction of its sales even as analysts forecast it will expand earnings at a 35% compounded rate annually for the next five years.

CWH Chart

CWH data by YCharts

With the stock trading for just four times the free cash flow it produces, investors may consider camping out with the stock for a long time to come.

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