Investing in camping stocks | The motley madman
Even before the start of the COVID-19 pandemic, the National Park Service had noted a steady increase in the number of camping trips Americans took each year. But the pandemic has sparked renewed interest in camping and other outdoor activities. Younger generations are driving much of this growth, and tens of billions of new dollars will be spent on camping gear each year over the next several years as these young enthusiasts gear up for their excursions. .
This could be a lucrative niche for investors in the travel and retail industries. To that end, here are some of the top stocks to consider when investing in the great outdoors.
Invest in camping stocks
The main way to bet on the camping industry is through retailers and manufacturers who sell camping equipment. Mega-merchants such as Walmart (NYSE: WMT) and Amazon (NASDAQ: AMZN) participation rights on a large part of this category of consumer spending. There is also the highly correlated RV industry, with Camping world (NYSE: CWH) a leading player as a seller of recreational vehicles and camping equipment.
But for a more focused game on camping, here are six actions to take a close look at for 2021 and beyond.
|Society||Market capitalization||The description|
|Dick’s Sporting Goods (NYSE: DKS)||$ 11.6 billion||A leading omnichannel retailer for sports and other outdoor gear.|
|Outdoor Deckers (NYSE: BRIDGE)||$ 10.6 billion||A holding company that owns the shoe brands UGG, Hoka, Teva and Sanuk.|
|YETI Holdings (NYSE: YETI)||$ 8.1 billion||The manufacturer of bags, coolers and glasses for outdoor enthusiasts.|
|Columbia Sportswear (NASDAQ: COLM)||$ 6.7 billion||Outdoor clothing, clothing, accessories and equipment for adventurers.|
|Johnson outside (NASDAQ: JOUT)||$ 1.1 billion||A diversified manufacturer of outdoor equipment and vehicles.|
|The 5 big sporting goods (NASDAQ: BGFV)||$ 604 million||Small West Coast retailer specializing in sportswear, footwear and outdoor gear.|
1. Dick’s sporting goods
Few retailers have received a boost as big as Dick’s Sporting Goods through a resurgence of travel and outdoor experiences. A midsize retailer working hard to update its operations for the digital age through 2020, the company’s work to reach consumers through its stores and website paid off when the pandemic hit and consumers have started to update their gear for outdoor adventures. Dick’s has gone from a struggling stock to a high flight, returning nearly 200% from a combination of a stock price appreciation and its dividend payout in 2020 and 2021.
Dick’s offers a wide range of clothing and gear for all kinds of outdoor activities, and is increasing its digital sales at a steady pace as consumers get used to shopping online. The company’s large store base gives it a head start in this department, also serving as a distribution center (including same-day order pickup) and a place where customers can make returns. . With millions of new athletes created over the past two years, Dick’s believes it can exceed the expected single-digit growth in sporting goods sales in the coming years through an omnichannel sales strategy.
2. Outdoor Deckers
You might not want to hike in a pair of UGG boots, but for those who like “glamping” (a portmanteau that combines “glamor” and “camping”), UGG might be more on trend than the outdoor shoes. To roam the trails and endure long excursions, there is the running and hiking shoe company Hoka. Both brands are part of the parent organization Deckers Outdoor.
Like other clothing and accessories companies, Deckers has been a major beneficiary of the recent surge in outdoor activities. Add their Teva and Sanuk sandal and shoe brands, and Deckers has a shoe for just about any travel and adventure imaginable. It’s unclear how long its double-digit percentage sales growth will continue, but Deckers is building a small shoe empire worth watching.
3. YETI Holdings
YETI has seen impressive growth after its successful IPO a few years ago. The stock was in tearing and had doubled in value from its public debut in late 2018 through the end of 2019. While the pandemic caused a brief hiccup for the company, sales rose again after campers started to equip yourself with new bags, coolers, and travel glasses.
Part of YETI’s strength is not just in its products; it is also the business model. More than half of the revenue comes from direct-to-consumer channels, such as an order placed directly on its own website and shipped to the customer from YETI. It is an efficient manufacturing and retail model that gives YETI an above average operating profit margin (at 20% on an adjusted basis) compared to a traditional retail model, which tends to fall in the single-digit operating profit percentage range. More than just a manufacturer of outdoor equipment, the YETI share could be a solid investment in a history of long-term growth for the mainstream brand.
4. Columbia sportswear
The apparel industry was hit hard by COVID-19 in 2020. Stuck at home for part of the year, new clothes hit the bottom of the household shopping list and it took time for consumers to start updating their wardrobes again. Outerwear, outerwear and gear company Columbia Sportswear has not been spared the pain.
The company is making a solid comeback in 2021, however, and approaching its 2019 sales record. It’s not just that clothing is one of the hottest themes in the retail industry right now. . Columbia (along with its subsidiary brands Mountain Hardwear, SOREL and prAna) provides comfortable gear to suit the adventurous spirit, a yarn category in high demand for campers and vacationers as travel begins to make a comeback. Columbia is riding the wave and its long term growth and revenue is back on track.
5. Johnson outside
Camping and outdoor activities are all about the experience, and quality experiences are a major travel theme for consumers. The right equipment can be the key to an enjoyable experience. Enter Johnson Outdoors. The company operates in four segments – fishing, diving, camping and personal watercraft – and is responsible for brands such as Eureka !, Jetboil, Scubapro, Humminbird and Ocean Kayak.
This is a small cap stock, so its price can be extremely volatile. Nonetheless, Johnson Outdoors is growing at a steady pace as various camping and water sports activities gain traction. As it has developed over the years, this manufacturer has also become very profitable. This is a leading small growth company to consider in the camping stock world.
6. The 5 big sporting goods
Big 5 is by far the smallest business on this list and is a possible business takeover game. The west coast-based sporting goods retailer struggled to spur growth relative to its e-commerce peers in the years leading up to 2020, but the pandemic and an increase in camping and sports interests have threw Big 5 a lifeline. Revenue quickly hit all-time highs and the retailer is suddenly very profitable.
The question Big 5 now faces is whether it can maintain its new customer base and profitability as the pandemic gradually abates. But one thing is certain: the Big 5 is in better shape than ever. Don’t rely on this small sporting goods business.
Camping is a travel favorite
As consumer trends constantly change, a new generation of travelers seem more interested in outdoor exploration than any previous group. Camping is a favorite vacation activity, and investing in equipment manufacturing and retailing could pay off in the next few years.
However, since most of the stocks on this list are small, keep in mind that prices can be very volatile. Remember to invest in companies that you believe have a lasting advantage in the camping and outdoor industry, and stay invested for the long term.