Marine Recreation Stocks Could be a Key Opportunity as World Reopens (BC, BTIM, HZO)

Vaccine-induced herd immunity, better testing systems, the end of the cold & flu season in the northern hemisphere, and the gradual evolution of the virus toward favoring transmissibility over virulence are all contributing to the widespread sense that the world is about to move out of the “pandemic crisis” and into the “post-pandemic normalization”.

That’s great news for everyone. But, in the stock market, it’s particularly great news for certain stocks, particularly those in industries tied to the travel and leisure marketplace.

Stocks related to the boating industry are dead-center beneficiaries of this trend, and may have been overlooked by the market until now. According to the BEA, Boating and fishing are the largest outdoor recreation activities in the U.S., totaling $23.6 billion in current-dollar value added.

With that in mind, we take a look at a few interesting boating stocks with momentum and active catalysts, including: Brunswick Corporation (NYSE:BC), Boatim Inc (OTCQB:BTIM), and MarineMax Inc (NYSE:HZO).

 

Brunswick Corporation (NYSE:BC) trumpets itself as a company headquartered in Mettawa, IL, with leading consumer marine brands.

The company’s brands include Mercury Marine outboard engines; Mercury MerCruiser sterndrive and inboard packages; Mercury global parts and accessories including propellers and SmartCraft electronics; Power Products Integrated Solutions; MotorGuide trolling motors; Attwood, Mastervolt, and Whale marine parts; Land ’N’ Sea, BLA, Payne’s Marine, Kellogg Marine, and Lankhorst Taselaar marine parts distribution; Mercury and Quicksilver parts and oils; Bayliner, Boston Whaler, Crestliner, Cypress Cay, Harris, Heyday, Lowe, Lund, Princecraft, Quicksilver, Rayglass, Sea Ray, Thunder Jet and Uttern boats; Boating Services Network, Freedom Boat Club and Boat Class.

Brunswick Corporation (NYSE:BC) most recently announced that it has entered into a definitive agreement to acquire its Freedom Boat Club of Chicago franchise operation and territory from its current owner. The scope of the transactions includes all four current Illinois-based locations and rights to build new club locations in part of Northern Illinois and portions of Northwest Indiana. Currently, there are three Freedom Boat Club locations in downtown Chicago and one in the Northwest suburbs, with plans to launch new locations during the 2021 boating season.

“Chicago is the third largest city in the United States, and we believe there is tremendous opportunity to grow Freedom Boat Club in this market,” said Cecil Cohn, Freedom Boat Club Network president. “The franchise owner who established this territory, successfully grew the business and established the right team to provide exceptional service to its members. With this acquisition, we will continue to accelerate Freedom’s growth in this market and advance our expansion into the Upper Midwest. We look forward to continuing to serve our members and grow our footprint in some of the best boating communities throughout the world.”

The stock has suffered a bit of late, with shares of BC taking a hit in recent action, down about -5% over the past week. Shares of the stock have powered higher over the past month, rallying roughly 6% in that time on strong overall action.

Brunswick Corporation (NYSE:BC) managed to rope in revenues totaling $1.2B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 26.5%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($587M against $1.1B, respectively).

 

Boatim Inc (OTCQB:BTIM) frames itself as a globally operating online marketplace and special interest social network for both the boating industry and boat users. Boatim Inc. was founded in 2018 and currently operates with offices in Miami (USA) and Barcelona (Spain). The technology start-up provides industry-specific software, aimed at facilitating the process of buying and selling boats and providing digital maritime services online.

On Boatim.com the boating industry can sell and promote products and connect with a fast-growing potential customer base, while boat users can explore and buy boats, and connect with like-minded people and brands. The platform, that can be accessed through both mobile devices and desktops, generates revenues through listing placements and subscription plans, as well as on-platform ads. Thanks to the great business model scalability, more revenue streams will be added soon. Since August 2019, the privately funded start-up has become a publicly listed entity, trading at the OTCQB Venture Market under the trading symbol BTIM.

Boatim Inc (OTCQB:BTIM) most recently announced appointment of its new Florida based CFO: Mr. Mario Beckles, CPA, was appointed as a member of the board of Directors of the Company effective immediately and as new Chief Financial Officer commencing on April 1, 2021.

According to the company’s release, Mr. Beckles has over 20 years of experience in financial reporting, financial accounting, tax, and audit works. He is US based (FL) and his areas of expertise include, inter alia, information technology and retail. He began his career as a Senior Auditor with Deloitte and has since held positions as CFO of First Liberty Power Corp, a publicly traded mining company, was a Partner at Jersey Fortress Capital Partners, a boutique investment banking firm and was a Senior Financial Reporting Analyst with SimplexGrinnell, a $2B Fire & Security Contractor. Mario is a member of the American Institute of Certified Public Accountants and holds a CPA license with the state board of Florida.

Mario replaces Boatim Inc.´s prior CFO, Mr. Benjamin L. Salter: “Being European based and facing continuing international travel restrictions, and in view of Boatim’s focus on strongly scaling its US market presence, we collectively felt this role would be better performed from within the US.” says Salter.

New director Beckles adds: “With major steps already taken, I look forward to ensure the necessary frequent alignment with Boatim´s growing number of US-based counterparties and service providers, especially those major firms we are in touch with to launch our online boat insurance and financing features.”

Boatim Inc (OTCQB:BTIM) have pulled back in recent action to test support in the $0.50/share area. The stock has been gradually picking up liquidity and volume, and the company has started to express catalysts that line up well in terms of introducing commercial performance in the quarters ahead.

 

MarineMax Inc (NYSE:HZO) bills itself as the world’s largest recreational boat and yacht retailer, selling new and used recreational boats, yachts and related marine products and services, as well as providing yacht brokerage and charter services.

MarineMax has over 100 locations worldwide, including 77 retail dealership locations, including 30 marinas or storage operations. Through Fraser Yachts and Northrop and Johnson, it is also the largest super-yacht services provider, operating 27 locations across the globe. MarineMax provides finance and insurance services through wholly owned subsidiaries and operates MarineMax Vacations in Tortola, British Virgin Islands. The Company also operates Boatyard, a pioneering digital platform that enhances the boating experience.

MarineMax Inc (NYSE:HZO) recently announced results for its first quarter ended December 31, 2020, including an increase in revenues of 35%, or over $107 million, to $411.5 million for the quarter from $304.2 million in the comparable period last year. Same-store sales grew over 20% in the quarter, driven by even greater growth in comparable new units sold of over 35%. The 20% same-store sales growth was on top of 24% growth in the comparable quarter last year, as demand for boating remains strong relative to prior years.

  1. Brett McGill, Chief Executive Officer and President, stated, “We delivered record sales and earnings growth in the quarter on top of very strong performance a year ago as we continue to outperform by effectively executing on our balanced growth strategy. We grew market share as we drove 20% same-store-sales growth that was fueled by greater overall unit growth. Our entire team contributed to these impressive results, supported by our global market presence, premium brands, exceptional customer service and ongoing investments in technology. The meaningful margin expansion in the quarter was bolstered by growth in product margins, storage and service, Fraser Yachts and Northrop & Johnson, our global super yacht services businesses and our finance and insurance businesses. Our focus on driving margins and improving our cost structure continues to produce significant leverage in our operating model.”

The stock has suffered a bit of late, with shares of HZO taking a hit in recent action, down about -15% over the past week. Shares of the stock have powered higher over the past month, rallying roughly 15% in that time on strong overall action.

MarineMax Inc (NYSE:HZO) managed to rope in revenues totaling $411.5M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 35.3%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($120.9M against $321.2M, respectively).

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Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email (alanmasterson@wallstreetpr.com) or his Google+ page (https://plus.google.com/103338576216002376250).

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