Buy Camping World IPO up to $26

Camping World (NYSE: CWH) will price its initial public offering (IPO) either Friday (Oct. 7) or early next week. The eagerly-awaited deal gives investors the chance to partake in the growth of towable recreational vehicles. Subscribers are familiar with my enthusiasm for the RV market. Parts suppliers Drew Industries and Patrick Industries are currently in our portfolio.

Camping World is the largest RV retailer in the U.S. It sells campers, trailers, motor homes, parts, accessories and service plans through its 120 retail locations. It also arranges financing of vehicle purchases through third parties.

Sales of new RVs rose 17% in the first half of 2016. Total revenue, however grew only 11% due to flat sales of used RVs and slower sales of parts and accessories. Earnings grew 11%. Although selling used vehicles is currently weighing down the overall growth rate, the company is able to enjoy profits during the entire life cycle of an RV as opposed to the parts manufacturers whose growth is heavily tied to new units.

No formal estimates exist for an IPO until its underwriting brokerage firms pick up coverage after the deal is priced. My estimates give me a target value of $30 for the stock.


The suggested price on the deal is $21 to $23. Although I’ve found it a nearly impossible mission, you can ask your broker if it’s possible to have shares allocated to your account from the IPO at the deal price. If not, watch the stock when it opens (typically mid-day) and buy up to $26.

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