RVs Ride on to "Hot List"

08/05/2016 8:00 am EST


John Reese

Founder and CEO, Validea.com And Validea Capital Management

At Validea, John Reese maintains a "Hot List" portfolio that includes 10 stocks selected by analyzing the various strategies of the market's most legendary investors. The current portfolio includes a pair of stocks in the recreational vehicle market.

Leading the way with gains in our Hot List portfolio over the past month was Thor Industries (THO), which was up 13.25%.

The stock is part of our Hot List portfolio based on the “Growth Investor” strategy of Martin Zweig.

Thor Industries manufactures and sells various recreational vehicles (RV) throughout the United States and Canada, as well as related parts and accessories.

On July 1, THO announced the acquisition of Jayco Corp., in a $576 million all-cash transaction, which is expected to expand THO's exposure in recreational vehicles (RVs), traveling and camping trailers, high-end diesel Class A and large Class C motorhomes.

Over time, the acquisition is expected to help Thor Industries lower its overall cost and improve earnings. THO has a 21.6% return on equity and offers a 1.7% dividend yield.

Another top performer in the Hot List over the past months was Drew Industries (DW), which was up 6.35. Drew Industries is part of our Hot list portfolio based on the “Value Investor” strategy of Benjamin Graham.

Indiana-based Drew is a supplier to the recreational vehicle and manufactured homes industries.

Through its subsidiaries, Lippert Components, and Kinro, it produces a range of components, including windows, doors, bath and shower units, axles, upholstered furniture, awnings and slide-out mechanisms for RVs.

The company also makes components for modular housing, truck caps and buses, and trailers used to haul boats, livestock, equipment, and cargo.

Drew â€" with a $2.17 billion market cap -- has a 21.6% return on equity and a dividend yield of 1.4%. Drew's EPS growth over a 10-year period is 60.9%, passing the Benjamin Graham Long Term EPS Growth test.

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By John Reese, Editor at Validea

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