Winnebago Stock Rating Upgrade Doesn't Fully Reflect Strength


Iconic motor-home maker Winnebago Industries (WGO) is putting up some pretty good numbers. And on Wednesday the Relative Strength (RS) Rating for Winnebago stock climbed to 71, upgraded from 66 amid renewed strength.


The new 71 RS rating shows that Winnebago has outperformed 71% of all stocks over the last 52 weeks. The RS Rating pits a stock’s 12-month performance against all other stocks. It’s a good but not great rating. Market research shows that the market’s biggest winners often have an 80 or better RS Rating in the early stages of their moves. However, Winnebago’s other key ratings indicate the stock is stronger than the RS Rating implies.

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Winnebago Stock Among Top 20% On Key Metrics

Minneapolis, Minn.-based Winnebago has a top-notch 95 Earnings Per Share Rating, out of 99. That means its recent quarters and years profit growth tops all but 5% of companies. It carries an 81 Composite Rating, putting it in the top 20% of stocks on the group of IBD’s five most stringent ratings. And it boasts a superior A SMR Rating (sales+profit margins+return on equity) on an A-to-E scale with A tops. One yellow flag is its D Accumulation/Distribution Rating, which means that institutional investors like mutual funds are selling a bit more shares than buying. Look for that to improve to at least a C rating.

Winnebago stock is building a cup with handle pattern with a 64.37 buy point. See if it can clear the breakout price in volume at least 40% above average. It fell 3% Tuesday to just below 56. One reason for the drop is that peer Thor Industries (THO) reported strong earnings early Wednesday but some analysts saw signs of flagging demand for RVs, and Thor fell nearly 5%. If the economy continues to recover in 2023 it’s likely more Americans will take to the open road, lifting RV sales.

A Pause After Profits, Sales Skyrocket

Winnebago reported 14% earnings growth last quarter, to $3.02 per share. Sales grew 14% year over year to $1.18 billion. Those numbers were actually a pause from the frantic growth the prior three quarters. During that time, EPS growth ranged from 42% to 98% and sales growth from 39% to 52%. The RV maker is expected to report its latest numbers on or around Dec. 16.

Winnebago stock earns the No. 3 rank among its peers in the Building-Mobile/Manufacturing & RV industry group. Thor Industries (THO) and Cavco Industries (CVCO) are also among the group’s highest-rated stocks.

When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.

IBD’s Relative Strength Rating tracks a stock’s price performance with a 1 (worst) to 99 (best) score. The score shows how a stock’s price performance over the last 52 weeks compares to all the other stocks in our database.


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