by Daniel Shvartsman
Investing.com - Thor Industries (NYSE:THO) shares traded higher on Wednesday after the company announced a $250M share buyback authorization.
The recreational vehicle maker's shares were up 3.2% in Wednesday trading after announcing the share buyback the prior evening.
The press release announcing the buyback also included commentary on the share price. "Our strong earnings growth positions us to drive value back to our shareholders," said Bob Martin, President and CEO of Thor Industries. "We believe there is a material misalignment between our value and our stock price. Given our favorable outlook on the industry and in our business, there is no better investment opportunity for THOR than its own shares at the current market price."
Thor's revenues and earnings have risen considerably over the pandemic as various restrictions led to a camping and road trip boom that benefited the sector. Thor has also pursued a roll-up strategy, acquiring Tiffin Motor Homes for $300M and RV parts maker Airxcel for $750M over the past 12 months.
Shares are up only 5.5% for the year, trailing the indices, as investors focus on the post-pandemic period and questions over when a slowdown will set in for Thor and peers. The buyback, which is open for 3 years and would amount to 4.5% of the outstanding shares at current prices, and management commentary push against that skepticism, but it remains to be seen whether the market will buy it.
Peer Winnebago Industries Inc (NYSE:WGO) is up 3.3%, while Camping World Holdings Inc (NYSE:CWH) is up .8%.