Cyclicals - Danger - Beware
Enough with the easy stuff like utilities and restaurants. Let’s dive right into the deep end and try to swim.
*****This is a important story, so pay close attention.
Years ago I served on a committee with the best selling author of investment textbooks in U.S. history. He was a smart guy, and very highly regarded by his peers. He was talking to another professor about a graduate level security analysis class that he taught every year. The class required each student to do a 30 page in-depth analysis of one company. The esteemed professor said:
“I like it when the students chose a predictable company like Coca-Cola or Proctor and Gamble, I just hate it when they choose a cyclical, because I have no idea how to value that kind of company”
Many folks just give up. We will first try to pick the best consumer cyclical, and then try to compare it to some other stocks. We work of other cyclicals like retailers, home builders, and autos at another time.
Let’s start with BC - Brunswick ($72) and compare it to:
Malibu Boats - MBUU - ($55)
Mastercraft Boats - MCFT - ($26)
Marine Max - HZO - ($31)
Thor - THO - ($81)
Winnebago - WGO - ($55)
Camping World - CWH - ($26)
Polaris - PII - ($103)
Acushnet - GOLF - ($44)
Latham - SWIM - ($3.2)
Whirlpool - WHR - ($141)
Leggett and Platt - LEG - ($32)
Let’s postpone this work until we consider a few issues.