Description

Coachmen Industries builds RV's and trailers under the Shasta,Coachmen, and Viking names and has also built up a large modular housing business which is a big step above the usual double wide mobile home one usually associates with factory built housing. They have been in the RV business many years and their extremely strong balance sheet with no net debt is a testament to their long experience in this viciously cyclical industry. Recent declines in interest rates and energy prices will help overcome the downturn they experienced this year as they currenly expect to lose 25 cents a share. This company is capable of earning almost $2 per share as they did in 1998 and 1999. With a book value of $13.25 and excellent mfg facilities as well as recent modular housing acquisitions Coachmen is well-positioned to endure weak consumer confidence and to emerge from the downturn as a prime beneficiary of baby boomers entering prime RV purchasing age. Coachmen has also showed its savvy in not buying up its dealerships as Fleetwood and others did to their extreme detriment. This is a stock that would be very reasonably priced at double current levels in any kind of economic rebound. Coachmen has been the subject of an announced takeover bid previously and the suitor may return again at the appearance of a turn in the economy.

Catalyst

rise in consumer confidence, lower energy costs encouraging hesitant RV purchasers, increased perception of the quality of factory-built, modular housing and a potential takeover as Coachmen turned down a bid from competitor Thor less than two years ago.