Summary: ON SALE
Score: 16/20
MOS: 85%
Share Price: $32
Sticker Price: $215
Is MarineMax stock a good buy?
MarineMax is one of the largest boat retailers in the US. They were founded in 1998 and are based out of Clearwater, FL.
MarineMax sells watercrafts ranging from 11 foot fishing boats on up to 100 foot yachts out of retail locations in Florida, Texas, Alabama, Georgia, South Carolina, North Carolina, Minnesota, New work, New Jersey, and Massachusetts.
As quoted on their website “We aren’t defined by fiberglass and steel. Boating opens doors that connect us with family, friends and places. We explore the unknown, which sometimes is a place, but more frequently, and importantly, a state of mind that’s unlocked only by water. You never quite know what it will be. But it’s something you didn’t have before. Something you’ll never forget, and it will change your life.”
Boating is an excellent hobby and a great way to separate yourself from the stressors of life.
COVID-19 made a negative impact on a lot of retail industries but one industry that experienced a positive impact from COVID-19 was the boating industry. In fact, the National Marine Manufacturers Association reported some interesting facts for 2020…
- Personal water craft sales were up 41% from a year ago
- Saltwater fishing boat sales were up 9% from a year ago
- Jet boat sales were up 31% from a year ago
- Outboard engine sales were up 28% from a year ago
Here is a quick snap shot of MarineMax’s revenue growth over the last 4 years
- 2017 Revenue: $1B
- 2018 Revenue: $1.17B (17% increase)
- 2019 Revenue: $1.24B (6% increase)
- 2020 Revenue: $1.5B (20% increase)
The pandemic has caused people to travel less which means they’ve been spending more money on toys such as boats, ATVs, motorcycles, etc.
On a personal note, I live in a suburb west of Milwaukee, WI in an area known as “Lake Country.” This area has about 15 lakes so boating and fishing are very popular. Most boat retailers in this area sold out of inventory already in July of 2020 and if you wanted a boat, you were put on a waiting list with expectations to receive a watercraft in fall or winter. I asked retailers if a sell off like this has occurred before and the answer was a resounding “never.”
Stockopedia.com recently classified MarineMax as a high quality stock. They stated that high quality stocks tend to be resilient, cash-generating business than can compound investment returns over time. They also talk about the 5 year ROIC of 16.6%. As most of you know, Tykr uses ROIC as one of the key metrics to determine the score. On the WHY page MarineMax has an ROIC score of 5/6 which means they are allocating capital to profitable investments. In other words, they are using their cash to efficiently grow the company and make more money for shareholders like you and I.
Yahoo Finance recently classified MarineMax as a strong buy stating that value investing is clearly one of the most preferred ways to find strong stocks in any market and MarineMax is most definitely one of those stocks.
Here is a quick comparison to the competition:
BC (Brunswick Corp)
Summary: OVERPRICED
Score: 4/20
MOS: 0%
Share Price: $74
Sticker Price: $0
MPX (Marine Products Corp)
Summary: WATCH
Score: 10/20
MOS: 39%
Share Price: $15
Sticker Price: $26
With a score of 16/20, the financials are definitely a lot stronger than the competition. With a MOS of 85% (Share Price of $32 vs a Sticker Price of $215) this stock has some room to grow. If you’re looking for a fun recreational stock to diversify your portfolio, MarineMax may be the perfect fit.
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The Summary, Score, and MOS of this stock may have changed since the posting of this review. Please login to Tykr to see up-to-date information.