How COVID-19 Jolted the RV Market

Ah, the old RV. A great way to drag your family on a vacation, explore the countryside, and spend half your savings on gas.

Thanks to COVID-19, RVs (formally known as Recreational Vehicles) now have a new shine to them. Where people dreaded a road trip stuffed in one with several people, they now see it as an escape from reality.

Air travel now gives passengers a mini heart attack, solely from the fear of contracting COIVD-19. The cleanliness of many hotels was already in question, and this pandemic has made people question them even more. And cruises, those skyscrapers of the water aren’t traveling anytime soon.

If you don’t live on either of the coasts and have convenient access to the beach, an RV trip is your next best option.

RV Market: Sales

People are looking for an alternative vacation this year, resulting in an increase in RV market sales. RV wholesale shipments had their highest monthly total since October 2018, according to the RV Industry Association. Deliveries to retailers saw a 10.8% rise from June of 2019. RVs are flying “off the shelves.”

While sales were down for April and May, they have jumped up in June. Due to uncertainty regarding COVID-19, consumers were not spending as much in April and May. Now that it seems most layoffs have occurred, people feel more secure spending on non-essentials.

One report found that 94% of consumers still plan to take a vacation this year. With normal traveling options unavailable or more difficult, they are resorting to other options, one being RVs trips.

RV Market: Stocks

People tend to be afraid of stocks and the stock market, partly because it has the perception of being extremely complicated.

A decent part of the stock market is identifying trends and trying to predict which will do best in the future. That’s the story of many “pandemic plays.” These are companies and industries that have benefited from COVID-19 and the lockdown.

Companies like Zoom Video Communications which helped companies/schools work from home. Or Moderna, a biotech company that is helping to develop a vaccine. But RV companies have also benefited greatly, as their stocks have done well this year.

Two of the biggest RV companies are Winnebago Industries and Thor Industries. Both are currently over a 150% gain from their lows earlier this year compared to the S&P at a 50% gain (still an impressive feat).

Another play related to the RV market: Camping World Holdings (CWH). They offer more than just RVs, providing gear, maintenance, and other outdoor products. From the beginning of 2020 they are up 125%, and they are up an even crazier 736% since their low of $3.87 on March 18th.

Electric RVs

For those unaware, the electric vehicle (EV) market has been a hot topic on the news recently. The EV market has been an area investors have piled cash into as there is great hope for them in the future. This is led by Tesla, as its market value has almost doubled in the last six months.

There are other EV companies that have now become household names. Some of these companies include Nikola, Nio, and Workhorse. All three of these have more than tripled their market value in the previous six months. While they aren’t at the level Tesla is at yet, they already have high expectations from investors.

I’m no Bill Gates, but seems to me if you threw the RV and EV hype together you’d get one hell of a stock. Maybe someone should call Elon Musk about this.