Jim Cramer: Thor Getting Hammered Is No Canary in a Coalmine

 | Jun 07, 2018 | 8:06 AM EDT
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Is it a canary in a coal mine?

Man, I can't tell you how much I wish that we outlawed coal mines if only so we don't have to hear about canaries anymore, you know, the time honored way we on Wall Street try to spot something with a bird of a news story that dies ahead of the death of shareholders.

Why do I not like it?

Because of companies like Thor Industries (THO) , yep, Thor, the world's largest maker of recreational vehicles.

Last night it announced a shortfall and, aside from the weather, it blamed higher cost steel and aluminum because of tariffs.

Canary in a coal mine!

Except the real issue here is that management told us not long ago that the tariffs would NOT be a big deal and not to worry about them.

NOT canary in a coal mine. More of a mistake.

I think Thor's become confusing and confounding for people because ever since the stock peaked at $157 back in January, it's been bedeviled by woes that make the story much less attractive than it was.

For example, two quarters ago they gave us no warning at all that labor costs might be getting tight, even though, in retrospect it had to be obvious to them because they assembled in one of the most robust labor markets in the country: Indiana.

Then when the stock was peaking the company let us know that labor costs had gotten prohibitive and the stock sold off. They did say that the tariffs were not a concern. "We don't buy much raw steel, some raw aluminum but most of it comes domestically so it will be minimal for us," the CEO, Bob Martin, said March 9 on Mad Money.

But then last night he told us otherwise. Canary?

No, how about disconcerting?

Now the question is going to become what's the real deal here? Is it demand? Is all of that millennial talk claptrap?

I don't think so. We had Marcus Lemonis on last night's Mad Money. He's the CEO of Camping World (CWH) , a gigantic retailer of all things RV and he says demand is very strong. I have no reason to doubt him, especially because he just bought a ton of stock in his company, which has seen its shares decline by 50% this year as it plummeted in tandem with Thor.

To me the issue is forecasting, getting a handle on the business. I don't think that, right now, gasoline, or credit, two things often cited as reasons for weakness aren't playing a role. There is a glut of product out there that should be worked off, weather permitting.

But let's stop it with the idea that the company's misfortunes are the beginning of something bigger.

They are simply the product of too many RVs, bad weather, raw costs and an inadequate ability to assess the future.

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