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Strategies & Market Trends : Value Investing

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From: E_K_S	5/3/2018 9:33:42 PM
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Camping World Holdings Inc (CWH) - started position @ $26.50 in this RV campsite & RV sales company AT&T Inc (T) - did a 30% add at $31.67/share 6.2% yield My BGS order for a 20% add did not fill as I was late this morning trying to decide to Buy before earnings. After reading the earnings from K, THS and some of the other food companies (GIS was a miss), I concluded the long term value prospects continue to look attractive. T is in a good sector as wireless leader in the deployment of 5G. Company is huge and hard to maintain growth (Mexico is probably their best growth region). I look at their 10.3 PE as quite attractive w/ the 6.15% dividend. My new 'Growth" candidate is Camping World Holdings Inc (CWH). Selling at a 12 PE it is growing EBITDA over 30% YoY; 2018 EPS growth rate 26.65% (will fall to 15.52% in 2019 by analysts). The huge problem is growth is done by acquisition so they have accumulated tons of debt. Last time I checked it was 32x net income=long term debt(it s/d be 4x). This is not sustainable. The company has options. One is to spin off the RV camping division into a REIT and finance issue long term debt (maybe preferreds). I like the general concept to also sell new & used RV's and run a maintenance/service shops all under one branded name. Several of the camp facilities offer high end services and long term (several monthly) park & camp options. Could see a steady pick up in activity w/ the baby boomers. It's affordable. CWH is a small starter position until I can figure out what management plans are for this huge pile of debt. There have been too many EKS stocks (a lot in the E&O space) where debt wiped out my investment. So I go into this w/ my eyes wide open. CWH has been building their brand and are the 'Carmax' for RV's (even includes boats). You get a small 1.1% dividend. CWH also impacted by RV cycle and inventory levels. The CWH value proposition is growth at 12.8 PE. I think the growth rate s/d be greater than current PE. EKS

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