In his first "Executive Decision" segment of his Mad Money program Friday night, Jim Cramer spoke with David Foukles, CEO of boat maker Brunswick Corp. (BC) , which continues to benefit as consumers flock to outdoor activities.
Foukles said that the momentum of 2020 is carrying through to the new year and despite a 30% increase in production planned for 2021, they still don't expect to add a lot of excess inventory to their dealer pipeline.
When asked about whether boating is gaining in popularity, Foukles explained that boating is a great, safe outdoor activity and with so many people having more flexible work schedules, even weekday boating is on the rise.
Foukles was also bullish on their Freedom Boat Club, which now has 3,200 boats in over 200 locations. He said the club is a whole new way to experience boating without having to purchase a boat on your own.
Let's check out the charts of BC before we make a purchase. We looked at BC on November 2 and recommended, "The charts of BC are not compelling right now. It may be better to stay in a safe harbor for a while longer."
In this daily bar chart of BC, below, we can see that prices have traded higher since our November 2 review. BC is trading above the rising 50-day moving average line and above the rising 200-day moving average line.
The On-Balance-Volume (OBV) line has moved sideways the past three months which is a bearish divergence when compared to the higher highs in price. The Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside for a take profit sell signal.
In this weekly bar chart of BC, below, we see a bullish chart with a little hesitation. Prices are in an uptrend above the rising 40-week moving average line.
The weekly OBV line shows a rise from March but perhaps some stalling in January.
The weekly MACD oscillator is still rising above the zero line but there has been some narrowing of the two moving averages that make up this trend-following indicator.
In this daily Point and Figure chart of BC, below, we can see a potential upside price target in the $102 area but also that a trade at $94.55 is needed to refresh the uptrend.
Bottom line strategy: The price of BC has tripled since its March nadir, so like I wrote in early November I would not be in a rush to go long BC right now. In hindsight early November turned out to be a buying opportunity. I guess I am not much of a boater.