Camping World (CW) is a US retailer of all things RV related. They act as a one stop shop for recreational vehicles, they offer new and used RV sales as well as accessories from bike racks to chairs and grills. The company started way back in 1966 and has built itself into a retailing behemoth boasting most recent annual revenue of nearly $3.3b. CW went public on October 7th with opening day trade seeing a high of 24.35 to Friday’s close of $21.06, that equates to a sell off of 13.5%. While downside pressures on the share price can be expected with any IPO, as long standing investors look to offload some or all of their stake in the company, the question becomes whether there is any inclination that the company can continue to grow and thus potential returns for existing investors. We’ll leverage some keyword search trends to try and get a sense of this.
CW does not disclose online sales but judging by the fact that the company’s largest retail segment is sale and resale of RV’s, approximately 77% of all revenue in 2015, we find it unlikely that online sales has a significant bearing on financial fortunes. That’s not to say that we can’t infer anything from internet search trends, as the company acknowledges the following:
“…we believe many people who transact at our retail locations visit our websites prior to visiting our retail locations….”
It may be difficult to show a 1-1 relationship between search trends and revenue, but we could suggest at the least that revenues are a function of online search interest in the CW brand. We assume that individuals inclined to purchasing an RV or looking accessories would start their search online, and while not all of these users are going to end up making an economic transaction, some of them will. We conclude that as more users search for RVs and related items, economic transactions for these respective goods will increase.
We note that CW does maintain a significant online presence, namely though their main website campingworld.com as well as an online forums boasting 7.5 million visitor sessions in 2015. The website has ecommerce capabilities allowing them to derive revenue online.
Taking the above into consideration we sampled a few keywords that may be indicative of the relative interest RV related matters and isolated for the US since that’s CW’s primary market.
We took a look into the keywords ‘RV’, ‘Recreational Vehicle’ and ‘RVing’ and identified the following search trends:
It would appear that the trends are a bit mixed. While searches for the terms ‘RVing’ and ‘Recreational Vehicle’ show a clear down trend since 2004, searches for ‘RV’ dwarf searches for the other keywords by a significant margin and show an upward trend since 2013. As searches for the term ‘RV’ are much greater in nominal terms, we’re inclined to give more attention to it than the others. Searches for ‘Camping World’ during the period 2007 – 2011 stagnated but then accelerated since then with higher peaks reached during the summer and higher lows reached during the winter months.
Search trends for both ‘Camping World’ and ‘RV’ both seem to be in line with CW’s revenue growth. We note that the period 2011-2015 have seen revenue grow 26-28%, with the exception of 2014 where revenue only grew at 15% rate. The search trend appear to bode well for the company moving forward since interest in RV’s appear to be increasing and that RV sales are a significant portion of the company’s revenue. New and used RVs made up 69% of CW’s total revenues in 2011, this figure increased to 76% figure in 2015.
While the stock price trend has been negative and does not show any indication of a reversal, we note that company prospects are moving in the opposite direction. A bucking of the share price trend may suggest that it’s time to deploy some capital!