Friday, June 17, 2011

$WGO Fell Off the $RIMM

[guest post by TS]

The only reason to include $RIMM and $WGO in the same blog title is to highlight their earnings woes reported Thursday. RIMM, the former champion of the smartphone, has been cored by both Apple and Google.  Winnebago, maker of big ticket RV's, is merely a victim of the economy.

Somebody is playing Winnebago in the options market.  Yesterday's (or just recent?) volume in $10 Jul 11 Calls was some 2000 contracts, and in the $7.50 Jul 11 puts some 1000.

My view on Winnebago is it represents the bottoming of the RV/manufactured housing market.  The recession did a Lehman on Fleetwood Industries, and WGO is feeling the heat (or cold?) through way depressed sales.  But, as jobs and housing creep back up, expect to see great things from WGO (at least from the current lows).  Check out Winnebago's balance sheet - quite healthy (though perhaps cashflow ain't what it was).


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