For his second "Executive Decision" segment of Tuesday's Mad Money program, Jim Cramer spoke in person with Bob Martin, president and CEO of Thor Industries (THO) , the RV maker. THO just delivered a stunning 95-cents-a-share earnings beat.
Martin drove from Indiana to New Jersey in his own personal motorhome to mark the occasion.
Thor cannot keep inventory on dealers' lots, Martin said. Everything they're building today has already been sold and their backlog extends into next year. Last year, people bought what they could, Martin said, but this year, they're ordering what they really wanted.
(For more on Thor Industries, see Jim Cramer: Is Anecdotal Information Really Worthless?)
Demand extends across Thor's entire product line, Martin added, from entry-level trailers to their biggest motor homes. In the U.S., travel trailers account for 80% of the RV market, with customers typically trading up every three to five years.
Let's check out the RV and the charts this morning.
In the daily bar chart of THO, below, we can see that prices made a small double-top pattern in March and May. Prices broke down below the late March lows to establish a downtrend but the rising 200-day moving average line looks like it will act as support.
The On-Balance-Volume (OBV) line shows a peak and decline from February telling us that traders have shifted from being aggressive buyers to being aggressive sellers. A big increase in the trading volume in recent days suggests that we might be seeing a turnaround in price just above the 200-day line. Some traders with a high cost basis may be sellers while others are using the weakness to increase their long exposure.
The Moving Average Convergence Divergence (MACD) oscillator has narrowed significantly and could soon cross to the upside for a cover shorts buy signal.