3 boat stocks to buy when the weather warms up
The yachting market is growing with the growing interest and participation of people, both as an exciting outdoor activity and its fitness-related benefits. The industry is a leading competitor in luxury leisure activities. There are approximately 140 million boaters worldwide, including 100 million in the United States and Canada. The market was valued at $27.32 billion in 2021.
According to a study, the global recreational boat market is expected to grow at a pace CAGR by 8.5% until 2025, with 59% of growth to be attributed to North America due to growing consumer engagement.
With the boating industry expected to reach $36.78 billion by 2027, growing at a CAGR of 5.1%, we believe MasterCraft Boat Holdings, Inc. (MCFT), BRP Inc. (DOOO)MarineMax, Inc. (HZO) could be solid buys this summer.
MasterCraft Boat Holdings, Inc. (MCFT)
MCFT is a leading innovator, designer, manufacturer and marketer of recreational powerboats through MasterCraft; NauticalStar; and ridge segments. The company’s offerings include recreational sport boats, boats for saltwater fishing and pontoon boats.
At the end of May, the company announced an exclusive series of 25 limited edition boats, namely the XStar S Piranha Limited Edition model. George Steinbarger, Chief Revenue Officer at MCFT, said: “We designed this limited edition XStar S to showcase the superior performance and advantage that the Ilmor Supercharged 6.2L engine delivers with the most premium boat. on the water.
During the third fiscal quarter ended April 3, MCFT’s net sales increased 26.3% year-on-year to $186.74 million. Adjusted net earnings increased 17.4% from the same period last year to $22.42 million, while adjusted net earnings per common share were $1.21, 19.8% increase over the prior year period.
The consensus EPS estimate of $1.49 for the fourth quarter (ending June 2022) indicates a 52.3% year-over-year increase. Similarly, the consensus revenue estimate for the same quarter of $194.52 million reflects a 25.1% increase over the prior year quarter. Additionally, MCFT has an impressive track record of surprise earnings, as it has exceeded consensus EPS estimates in each of the past four quarters.
The stock has gained 1.9% over the past month and 2.6% over the past five days to close the last trading session at $23.99.
MCFT POWR Rankings reflect this promising prospect. The company has an overall rating of B, which translates to Buy in our proprietary rating system. POWR ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
MCFT is rated A for Value and B for Growth. Within the Athletics and recreation industry, it is ranked #4 out of 38 stocks. To see additional POWR ratings for momentum, stability, feeling, and quality for MCFT, Click here.
BRP Inc. (DOOO)
Based in Valcourt, Canada, DOOO manufactures and markets powersports vehicles and marine products worldwide. The Company operates through two segments: Powersports and Marine. Its products are sold through a network of independent dealers, distributors and original equipment manufacturers.
In March, DOOO announced the return of the Can-Am motorcycle brand, with a line of all-electric products. New products should add to the company’s revenue stream.
DOOO’s revenue increased slightly year-over-year to C$1.81 billion ($1.44 billion) in the first fiscal quarter ended April 30. Net profit and EPS were CAD 121 million ($96.23 million) and CAD 1.46, respectively. Net cash flow from financing activities amounted to CAD 232.50 million ($184.92 million), up substantially from its negative value a year ago.
Street expects DOOO’s EPS to grow 93% year-over-year to $2.23 for the next fiscal quarter (ending October 2022). Similarly, analysts expect revenue for the same period to rise 50.4% year-over-year to $1.86 billion. Additionally, DOOO has exceeded consensus EPS estimates in each of the past four quarters, which is impressive.
Over the past three months, DOOO stock has gained 3.3% to close yesterday’s trading session at $67.54.
It’s no surprise that DOOO has an overall rating of B, which translates to Buy in our POWR rating system.
DOOO has a value and sentiment rating of B. It is ranked #3 in the athletics and recreation industry.
In addition to the POWR ratings we have listed above, one can see DOOO ratings for Growth, Momentum, Stability, and Quality. here.
MarineMax, Inc. (HZO)
HZO is a pleasure boat and yacht retailer and superyacht service company operating in the United States. It operates through two segments: retail operations and product manufacturing, and sells new and used recreational boats.
In April, HZO said it invested in Boatzon, an online boat and marine products retailer. The investment is expected to support the company’s goal of higher-margin business growth and portfolio diversification.
Earlier in the same month, HZO announced its acquisition of Superyacht Management, SARL, a superyacht management company based in Golfe Juan, France. The acquisition is expected to expand the service offerings of HZO’s superyacht brokerage subsidiary, Northrop & Johnson.
For the fiscal second quarter ended March 31, HZO’s revenue increased 16.6% year-on-year to $610.11 million, while net income increased 37.4% from the fiscal quarter. the previous year to reach $53.51 million. Net earnings per common share increased 40.2% over the same period last year to $2.37.
The Street EPS estimate for the third fiscal quarter (ending June 2022) of $3.03 indicates a 16.8% improvement over the prior year period. Street’s third-quarter revenue estimate of $763.49 million indicates a 14.6% year-over-year increase. Additionally, HZO has exceeded consensus EPS estimates in each of the past four quarters.
Shares of HZO gained 1.7% intraday to close yesterday’s trading session at $41.18.
HZO’s strong fundamentals are reflected in its POWR ratings. The stock has an overall rating of B, which is equivalent to Buy in our proprietary rating system.
HZO has an A rating for value and quality and a B rating for growth. It is ranked #2 in the same industry.
In addition to the POWR ratings I just highlighted, we can see the HZO ratings for Momentum, Stability, and Sentiment here.
MCFT shares were trading at $24.20 per share on Tuesday afternoon, up $0.21 (+0.88%). Year-to-date, the MCFT is down -14.58%, compared to a -12.48% rise in the benchmark S&P 500 over the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research. After…