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4 Stocks to Make the Most of a Sustained Demand for RVs

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When coronavirus gripped the United States last year, people were compelled to cancel their vacations. But when the restrictions began being eased, the wanderlust in people showed up again.

Americans resorted to traveling via recreational vehicles (“RVs”) as these offered them a safer and convenient way of spending time with family. Since learning and working remotely gained precedence during the pandemic, people also found it convenient to hit the road as they could work and learn while traveling as RVs come equipped with network connectivity facilities, among others.

First-time buyers flooded the RV market and camping regained popularity among American families. Per the Kampgrounds of America's annual North American Camping Report, in 2020, 13 million U.S. households camped in an RV, marking an increase of 1.6 million from 2019, as mentioned in a Sioux City Journal article.

Although the demand for RVs was boosted by the pandemic last year, the trend is sustaining in 2021 even with vaccinations progressing rapidly within the United States. RVs are gradually evolving from being a pandemic-induced choice for traveling to a sustainable one, owing to the myriad conveniences they provide to travelers.

A survey by the RV Industry Association, published on May 18 found that out of 180 million Americans surveyed, 56 million stated that they were planning “to go RVing” during summer. It’s interesting to note that among the reasons for choosing an RV, exploring, remote working and learning, and traveling with children and family were the top three in the survey. The least popular response was not being ready to take other forms of trips.

RV shipments have remained strong so far this year, reaching fresh all-time highs. According to a separate June 2021 survey report by the RV Industry Association, the industry set a new record for shipments “in each of the last four quarters.” The report further stated that in the second quarter of 2021, 151,760 units were shipped, marking an increase of 2% over the shipment record previously set during the first quarter.

The trend seems ready to be sustained throughout the year as well, which should propel RV shipments to new record highs. Per the latest quarterly forecast report by the RV Industry Association, the latest projections showed that the most likely year-end total for RV shipments in 2021 is 576,065 units, suggesting an increase of 33.8% from last year. The report further stated that this would also mark an increase of 14.1% from the current comparable record-high shipments of 504,600 units in 2017.

4 Top Stocks to Buy Now

The demand for RVs looks set to continue as people resort to it as a convenient way of spending time with family and fulfill their traveling needs. This seems then a good time to invest in companies that stand to benefit from this continued upswing. We have handpicked four such stocks that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Skyline Champion Corporation (SKY - Free Report) offers manufactured and modular homes, park models RVs, accessory dwelling units, and modular buildings and builds homes under the brand names of Athens Park Models, Dutch Housing, Excel Homes, and so on.

Shares of Skyline Champion have gained 93.4% year to date and it currently flaunts a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings increased 34% over the past 60 days. The company’s expected earnings growth rate for the current year is 64.7%.

Patrick Industries, Inc. (PATK - Free Report) manufactures and distributes components, building products, and materials for the RV, marine, manufactured housing and industrial markets.

Shares of this Zacks Rank #1 company have risen 22.7% year to date. The Zacks Consensus Estimate for its current-year earnings increased 15.2% over the past 60 days. The company’s expected earnings growth rate for the current year is more than 100%.

Cavco Industries, Inc. (CVCO - Free Report) designs, produces, and retails manufactured homes and builds park model RVs, vacation cabins, and so on. On Jul 26, the company announced that it has planned the acquisition of The Commodore Corporation which builds manufactured and modular homes in the United States, for a total of $153 million.

Shares of Cavco Industries have risen 42.9% year to date. The Zacks Consensus Estimate for its current-year earnings increased 25.7% over the past 60 days. This Zacks Rank #1 company’s expected earnings growth rate for the current year is 41.8%.

Winnebago Industries, Inc. (WGO - Free Report) manufactures and sells RVs and marine products primarily for use in leisure travel and outdoor recreation activities. The company offers motorhomes under the Winnebago and Newmar brand names.

Shares of Winnebago Industries have gained 17.2% year to date and it currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 6.6% over the past 60 days. The company’s expected earnings growth rate for the current year is more than 100%.