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Options Corner: Winnebago’s Implosion Could Signal A Comeback Opportunity

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After suffering a recent earnings miss combined with a challenging economic backdrop, shares of recreational vehicle provider Winnebago Industries, Inc. (NYSE:WGO) have printed gobs of red ink over the trailing month. Nevertheless, historical data reveals that investors tend to view bouts of unusual volatility as a buying opportunity, thus making the case for bullish speculation.

First, one of the main contributors to the downside in WGO stock centers on the underlying company’s fiscal-first-quarter results. Winnebago reported an adjusted loss per share of 3 cents, badly missing analysts’ consensus view of 20 cents. Further, revenue slipped 18% on a year-over-year basis to $625.6 million, also missing the estimated target of $672.232 million.

Second, management provided additional context, but this failed to bolster investor confidence. “As expected, the RV and marine operating environment remained challenging in the first quarter, marked by subdued consumer demand and a cautious dealer network reluctant to make significant commitments on new orders ahead of the historically slow winter season,” said President and CEO Michael Happe.

Nevertheless, the head executive stated that the company anticipates a rise in demand as the RV and marine markets enter the more sales-friendly spring season. To be fair, analyst views on a turnaround for WGO stock are split. However, a fundamental argument for upside speculation does exist.

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Full story available on Benzinga.com

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