Northern, WI  11/27/2012 (BasicsMedia)  — Thor Industries (NYSE:THO) is down 10% today after missing revenue and EPS numbers falling short on both but improving margins.  Shares in 2012 have moved higher starting out theyear around $27 p/s and testing the $45 level before reporting numbers. The sales for its towable segment rose by 28 percent. Revenues for Motorized RVs and the bus group increased by 95% and 2%, respectively. The RV backlog also increased by 73 percent to $516.7 million. The stock is currently up 50% on a YTD basis.

THO was built by way of acquisitions. Incorporated under the name of Airsteam in 1980, the company soon bought General Coach, a leading Canadian firm in the RV field. It penetrated the bus sector by acquiring ElDorado Bus in 1988 and National Coach in 1991. It also bought Champion bus in 1998 and Goshen Coach in 2005. Given its history, the company will likely continued to look to expand by making additional acquisitions. Last month, the company purchased the bus assets of Krystal Infinity, a bus manufacturer. The deal has allowed THO to benefit from economies of scale and more importantly, penetrate the small luxury bus market.

Therefore, THO not only expects to grow revenue through internal operations (via its growing towable segment), but also plans to continue to expand through strategic acquisitions.

Winnebego (NYSE:WGO)  reported its fourth quarter earnings on October 11. It topped the earnings estimate and met revenue expectations. The EPS of 14 cents was double the expected 7 cent/share profit and 16% higher Y-o-Y. The revenue figure of $162.5 million (in-line with expectations) was 24.5% higher Y-o-Y. The improvement in sales was driven by increased motor home deliveries. The margins improved because of tighter fixed cost absorption.

 The stock is up 85% on a YTD basis. The important question to ask is: is there some more growth to come? WGO’s revenue of $581 million this fiscal year is only one-fourth of its peak 2004 revenues. Though the company relies heavily on its motor home division, its towable trailer revenues are also growing rapidly following its acquisition of Sunnybrook, a towable trailer maker, two years ago. The towable segment, currently, accounts for 10% of the total revenues for WGO. This is almost double the 6% that the segment made in the last year.

Backlogs have been on the rise as well. The current backlog is the largest since the recession. Management believes that demand has been spurred as a result of positive dealer response to the new 2013 model year products. Due to massive backlogs, the company is ramping up its production facilities and will continue to increase its production rate in 2013.

Disclaimer:  We have no position in any stock mentioned here.

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