Now we all know what happened to Thor Industries (NYSE:THO) after the financial crisis hit causing the great recession---it was jolted like many cyclical businesses are in those instances and its top line took a sizeable hit, but it always remained profitable. A cyclical business that manages to stay comfortably profitable during an economic crisis not seen since the Great Depression definitely makes it a leader in its field in my books. The only other company in this space that I would like to be a shareholder of is Forest River, but in order for that to happen someone must convince the Oracle of Omaha himself to remove it from Berkshire Hathaway's sole possession and take it public, something I really don't think will ever happen.
Looking forward I think Thor is a good long play on the slowly improving economy. The company has a solid balance sheet with a good cash position and no long term debt. In addition, the aging population means demographic trends are in its favor. And the part I really like: a very high percentage of its sales are derived from the non-motorized RV segment, which I think provides more business stability during periods of high oil prices and slumping economic activity than say a company like Winnebago Industries (NYSE:WGO), which has always relied heavily on the motorized RV segment for sales.
To really see the advantage of being much more in the non-motorized RV segment versus the motorized RV segment during periods of both high oil prices and slumping economic activity one just needs to look at both company's last 5 fiscal years cumulative net income. After totaling the respective numbers for both companies we get Thor having a cumulative net income of $460.9 million and Winnebago having a cumulative net loss of $12.3 million.
The waters ahead may still be choppy for Thor, but barring the U.S. falling into another recession I think Thor should see a gradual but steady increase in business activity going forward with margins returning back to normal as housing activity gets back on a solid track. And judging by last Thursday's release of Q4-2012 preliminary sales figures it seems like this is starting to happen, albeit slowly.
Disclosure: I am long THO.