Camping World Holdings is a leading American outdoor and camping retailer that specialises in selling recreational vehicles (RVs), RV parts and accessories, and RV services. Founded in 1966, it has grown to become one of the most well-known destinations for RV sales in the US, with over 200 stores across the country. The company is listed on the New York Stock Exchange and currently has a market capitalisation of $343 million.
Camping World Holdings shares have been hit hard in the recent coronavirus-related market sell-off. Over the last month, the stock has fallen from around $16 to just $4, a decline of 75%. Of course, RV sales are highly cyclical, so you would expect the economic uncertainty associated with the coronavirus to have an impact on the company’s near-term sales and profits. Yet with the stock losing 75% of its value in the space of a month, could it be oversold?
Source: 2iQ Research
Looking at insider transaction activity, it’s interesting to see that a number of top-level insiders have purchased CWH shares recently. In the last two weeks, we have observed large purchases from Chairman and CEO Marcus Lemonis, President and COO Brent Moody, and CFO Melvin Flanigan, as well as two long-serving directors. Combined, these insiders have spent around $2.3 million on shares. In our view, this buying pattern does suggest that the stock is oversold right now, as these insiders are likely to have a good understanding of the company’s future prospects. With multiple insiders going long, we think the stock has the potential to rebound.