It may be summer, but boat stocks can’t seem to get out of the doldrums.
Shares of makers of power boats and other types of marine equipment have been struggling in the past several months, underperforming the S&P 500 index.
In the past three months,
MasterCraft Boat Holdings
Inc. has tumbled 33%, while
has dropped 29% and
is down 6.8%.
, a recreational-products company, has declined 5.1%. The S&P 500 is up 2.9%, rallying to a record high Friday.
Investors are concerned that enthusiasm for big-ticket items such as boats is waning. In addition, rainy weather this spring and summer may have deterred sales.
Joseph Altobello, an analyst at Raymond James, said falling boat sales signal that consumers are pulling back on discretionary spending and conserving money for needed items.
“It’s only natural that these stocks are going to be impacted more than the average stock because of the economic concern,” said Mr. Altobello, adding, “If I need shampoo, I’m not going to buy a boat.”
Raymond James recently downgraded three stocks—Malibu, MasterCraft, and MarineMax—citing weakness in demand for 2019.
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But Eric Wold, senior analyst at B. Riley FBR, said boat companies are poised to recover. While he said investors have been spooked by a reduction in boat registration, he cautioned that the data could be incomplete. He also said sales could be affected by the recent rainy weather in much of the country, which he said is a temporary problem.
“We should get better data and better trends, and most of the boat stocks will recover,” he said.
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