Thor Industries (NYSE:THO) bills itself as one of the largest recreational vehicle (RV) makers in the United States. Its business was severely impacted during the credit crisis, but management kept the bottom line in the black during the peak of the downturn. Thor just completed its fiscal year on a strong note and acquired a rival to boost its market share further. A reasonable evaluation leaves upside should demand for its products rise going forward. (For more, read 3 Secrets Of Successful Companies.)

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Full Year Recap
Total sales advanced 21% to $2.8 billion. The acquisition of towable RV rival Heartland at the end of calendar 2010 accounted for significant increase in the annual sales. The RV segment accounted for the bulk of sales at 85% and saw sales jump an impressive 26.6% on the back of strong trends in both towable RV trailers and RVs that qualify as their own drivable vehicles. The bus segment saw sales fall 3% and accounted for the remaining 15% of the total top line.

Despite the strong sales trends, operating income fell 10.9% to $152.6 million. The RV segment again led the way, though profit growth was only modest at 1.9%. The bus unit logged a 26.5% fall in operating profits. Lower income taxes tempered the net income decline to 3.4% as earnings fell to $106.3 million. However, higher shares outstanding pushed the earnings per diluted share decline to 7.2%, or $1.92.

Thor didn't provide specific forward guidance but did detail that it expects "RV retail sales to pull through wholesale shipments in the year ahead, and to improving conditions in the 2012 public transportation market to fuel better bus sales ahead." Analysts have quantified these expectations into a 1% drop in total sales to $2.72 billion for the coming year and earnings of $2.24 per share.

Thor considers itself the largest RV manufacturer in the world and maker of mid-size buses in the United States. It holds an estimated 37% of the total RV market and 38% of its defined bus market. It is also the second largest producer of ambulances, according to its count. It lists privately-held Jayco, Forest River, which is owned by Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) and Winnebago Industries (NYSE:WGO) as archrivals in the RV segment. Supreme Industries (NYSE:STS) is a competitor in the bus industry.

The Bottom Line
A market leading position, steady profitability and zero long-term debt make Thor one of the most appealing and purest plays in the RV space. A reasonable forward P/E of below nine and decent dividend yield of 2.7% are also appealing from an investment standpoint. Thor also looks to be able to acquire market share until organic trends improve along with the overall economy. Low gas prices currently could also work to stoke near-term demand. (To learn more, see Earnings: Quality Means Everything.)

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Tickers in this Article: THO, WGO, BRK.A, BRK.B, STS

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