5 Purchase-Rated Recreation Shares to Examine Out with Temperatures Rising

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The athletics and leisure market has grown with increased tourism and people’s active participation in outdoor sports activities. In addition, the increasing demand for fitness products due to the increasing awareness of health and fitness among people has benefited the industry.

Aside from significant pent-up demand, the easing of travel restrictions and COVID-19 vaccine boosters have prompted people to venture into leisure activities and sporting events as temperatures rise. This has led to an increasing demand for companies in this field.

The global recreational boat market is expected to reach US$64.08 billion by 2030. growing at a CAGR of 4.7%. Rising popularity of marine and coastal tourism coupled with rising demand for recreational watercraft is driving the growth of the market.

As such, it may be prudent to invest in fundamentally healthy Vista Outdoor Inc. recreational stocks (VSTO), MarineMax, Inc. (HZO), MasterCraft Boat Holdings, Inc. (MCFT), BRP Inc. (DOOO) and Columbia Sportswear Company (COLM). These stocks are rated Buy in our ownership POWR ratings System.

Vista Outdoor Inc. (VSTO)

VSTO designs, manufactures and markets outdoor recreation and shooting sports products. It is sold under different brands: Remington Ammunition, Bushnell, CamelBak, Bushnell Golf, Foresight Sports, Bell Helmets, Camp Chef, Giro, QuietKat, Stone Glacier and more. The Company operates through two segments: Sports Products and Outdoor Products.

On June 7, 2022, VSTO’s Remington Ammunition brand partnered with TrueTimber to create lifestyle apparel for hunters, shooters and brand enthusiasts. This partnership is expected to increase the company’s customer demand and expand its market reach.

VSTO net revenue for the fourth quarter of fiscal 2022 (ended March 31, 2022) increased 36% year over year to $808.60 million. It is gross profit increased 58% year over year to $287.41 million, while adjusted net income increased 94% year over year to $119.08 million. The company’s adjusted earnings per share rose 100% year over year to $2.04 for the same period.

Consensus EPS estimate of $1.90 for the fiscal first quarter (ended June 2022) represents a 9.4% year-over-year improvement. Consensus estimate of revenue of $779.92 million for the current quarter indicates a 17.7% increase over the same period last year. The company has an excellent track record of earnings surprise; it beat consensus EPS estimates in each of the last four quarters.

Over the past three months, the stock is down 15% to close the last trading session at $30.43

VSTO’s POWR ratings reflect this promising outlook. The company has an overall B rating, which means buy in our proprietary rating system. The POWR ratings evaluate stocks based on 118 different factors, each with its own weighting.

It has an A grade for value and a B grade for quality. Among the 39 stocks of Athletics & Leisure Industry puts VSTO first.

click here to view VSTO’s POWR Ratings for Growth, Momentum, Stability and Sentiment.

Marine Max, Inc. (HZO)

HZO is a pleasure boat and yacht dealer. It sells new and used pleasure boats, yachts, marine parts and accessories, and offers yacht brokerage and charter services. HZO operates in two segments: retail and product manufacturing.

On April 4, 2022, HZO acquired Superyacht Management, SARL based in southern France. With this acquisition, the company is expanding its business globally and is expected to achieve higher margins.

For the second fiscal quarter (ended March 31, 2022), HZO’s revenue increased 17% year over year to $610.11 million. Gross profit increased 30.9% year over year to $205.32 million, while net profit increased 37% year over year to $53.51 million. The company’s net income per common share was $2.37, a 40% improvement over the prior year.

For the third quarter of fiscal 2022 (ended June 2022), HZO’s revenue is expected to increase 14.6% year-on-year to $763.49 million. The Street expects its earnings per share to rise 16.8% year over year to $3.03 for the same quarter. HZO has beaten consensus EPS estimates in each of the last four quarters.

The stock is up 6.2% over the past five days to close the last trading session at $38.72.

HZO’s strong fundamentals are reflected in its POWR ratings. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. It has an A grade for value and quality and a B grade for growth. The stock is ranked #2 in the same industry.

click here to see HZO’s other momentum, stability and sentiment ratings.

MasterCraft Boat Holdings, Inc. (MCFT)

MCFT is a designer, manufacturer and marketer of recreational power boats through its four brands: MasterCraft, Crest, NauticStar and Aviara. It operates through three segments: MasterCraft, NauticStar and The Crest.

On June 22, 2022, MCFT introduced the XT22 T to the XT lineup, which features a traditional arc to offer more adaptability, performance and reliability. The new launch should generate high demand and thus increase sales.

MCFT net revenue increased 26.3% year-on-year to $186.74 million for the third quarter ended April 3, 2022. Adjusted EBITDA increased 16.4% year-over-year to $32.05 million, while Adjusted Net Income increased 17.4% year-over-year to $22.41 million. MCFT’s adjusted net earnings per share were $1.21, up 19.8% year over year.

Consensus EPS estimate of $1.49 for the fourth fiscal quarter (ended June 2022) represents a 52.5% year-over-year improvement. Consensus estimate of revenue of $194.52 million for the current quarter indicates a 25.1% increase over the same period last year. The company has an excellent track record of earnings surprise; it beat consensus EPS estimates in each of the last four quarters.

Over the past month, the stock is down 4.1% to close the last trading session at $22.30.

MCFT’s POWR ratings reflect this promising outlook. The company has an overall rating of B, meaning buy. The company has an A grade for Value and a B grade for Growth. Again, it ranks 3rd in the same industry.

To view additional POWR ratings for Momentum, Stability, Sentiment and Quality for MCFT, click here.

BRP Inc. (DOOO)

DOOO manufactures and markets power sports vehicles and marine products. It offers off-road, side-by-side and three-wheel vehicles; snowmobiles and personal watercraft; and jet boats, outboard motors, karts, motorcycles and engines for recreational aircraft. The Company operates through two segments: Powersports and Marine.

On June 15, DOOO increased its revolving credit facility by CAD$400 million to CAD$1.5 billion. With the increased credit facility, the company aims to make further investments for long-term growth and create value for its shareholders.

In the first quarter of fiscal 2023 (ended April 30, 2022), DOOO’s revenue increased slightly year-on-year to US$1.81 billion. The company’s sales of year-round products rose 1.3% year over year to $934.40 million.

Analysts expect DOOO’s earnings per share and revenue to grow 85% and 53.4% ​​year over year for the fiscal third quarter ended October 2022, to $2.13 and $1.90 billion, respectively . It’s beaten consensus estimates for the stock in each of the last four quarters, which is excellent.

Over the past five days, the stock is up 4.3% to close the last trading session at $65.68.

DOOO’s strong fundamentals are reflected in its POWR ratings. The stock has an overall rating of B, which equates to Buy. DOOO also has a B grade for value and mood. The stock is ranked 4th in the same industry.

click here to view DOOO’s other ratings for Growth, Dynamism, Stability and Quality.

Columbia Sportswear Company (COLM)

COLM offers active lifestyle apparel, footwear, accessories and gear products under four brands: Columbia, SOREL, Mountain Hardwear and prAna. The company operates in four geographic segments: United States, Latin America, Asia Pacific, Europe, Middle East, Africa and Canada.

On April 28, 2022, COLM announced the expansion and investment in its facility at the Robards, Kentucky distribution center. Tim Boyle, President, CEO and Chairman of the Board, said, “We believe investing in this space will be good for our business, strengthen our supply chain and allow us to hire world-class talent.”

On April 22, 2022, the Company’s Board of Directors approved a $500 million increase in the Company’s share repurchase authorization. This could significantly boost shareholder returns.

COLM net sales for the fiscal first quarter (ended March 31, 2022) increased 22% year over year to $761.51 million. The company’s operating income increased 19% year over year to $83.67 million. Net income increased 20% year over year to $66.84 million, while earnings per share increased 23% year over year to $1.03.

Analysts expect COLM’s EPS and revenue to increase 28% and 23.2% year over year for the third quarter of fiscal 2022 (ended September 2022) to $1.95 and $991.23 million, respectively. The company has beaten consensus estimates for earnings per share in each of the last four quarters, which is impressive.

Shares of COLM fell 2% over the past month to close the last trading session at $75.68.

COLM’s B rating means “buy” in our proprietary rating system. It has a B grade for mood and quality. Also, it is #5 in the athletics and leisure industry.

In addition to the POWR ratings just highlighted, you can see the COLM ratings for Growth, Value, Momentum, and Stability here.

VSTO shares traded at $29.72 per share on Tuesday afternoon, down $0.71 (-2.33%). Year-to-date, the VSTO is down -35.49% versus a -18.53% gain in the benchmark S&P 500 over the same period.

About the Author: Shweta Kumari

Shweta’s keen interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help private investors make informed investment decisions. More…

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