Jim Cramer thinks the “great outdoors” are a wise investment. And the recent stock performances of companies that comprise OBJ’s Outdoor Index validate his thesis.
On Monday, the animated host of the popular CNBC investment show “Mad Money” advised viewers to take a hard look at outdoor-focused public companies, as their performance during the pandemic has driven share prices to new heights.
“As the pandemic winds down, I think the great outdoors theme has more legs than you realize,” Cramer said on the show. “It could be a huge summer, even bigger than last summer, which means that any of these stocks could have legs, especially because so many of the big institutional investors have moved away from them.”
While Cramer’s three-minute segment centered on boat and RV manufacturers—all of which have been killing it during Covid, as more people hit the water and the road—Cramer recommended the stocks of five companies that OBJ tracks:
- Camping World Holdings Inc. (NYSE: CWH)
- YETI Inc. (NYSE: YETI)
- Callaway Golf Co., parent of Jack Wolfskin (NYSE: ELY)
- Vista Outdoor Inc., parent of CamelBak, Camp Chef, Bell, and Giro (NYSE: VSTO)
- Newell Brands Inc., parent of Marmot and Coleman (Nasdaq: NWL)
Of the five, Cramer expanded only on Camping World, saying, “I think this one’s a terrific regional-to-national growth story, and only sells at nine-times earnings. If you can get it at a discount after the quarter, I think you pounce.”
Indeed, the notion of pouncing on outdoor stocks has become popular during the pandemic, as evidenced by OBJ’s new Outdoor Index, which debuted last month. The Index is a composite of the stocks of 25 public companies with one or more outdoor assets in their portfolios. In the first quarter, the companies averaged share gains of 15.8 percent in the period, easily outpacing other indices such as the Dow Jones Industrial Average (7.8 percent), the S&P 500 (5.8 percent), and the Nasdaq (2.8 percent) during the same three-month window.
In April, share gains across the outdoor industry moderated, but the OBJ Outdoor Index still registered an average growth of 5.8 percent, placing it ahead of the Dow (2.7 percent), S&P 500 (5.2 percent), and Nasdaq (5.4 percent).
Next week, we’ll post part one of our profit and revenue recap of the outdoor companies that have reported first-quarter earnings for 2021. Our early analysis is that their sales and income growth is in line with Cramer’s comments and the stock gains they’ve enjoyed to date this year.
The big takeaways from the spotlight that Cramer shined on these businesses and how well they’re positioned four months into 2021: One, investors remain bullish on the industry; and two, programs like “Mad Money” will continue to showcase its rising fortunes—especially as more people buy apparel and equipment needed to explore the great outdoors.