Thor Industries SP has dropped almost 20% over the past week due to fears about oil prices and rising interest rates. But with oil prices dropping back below $50 and the yield curve showing 10 year rates at still low levels (currently c.2.61%), the drop looks a little overdone. Sales have grown rapidly in recent years, from just over $2.5bn in 2012 to almost $7bn forecast for 2017. Strong tail winds for the RV industry are expected to continue with the number of 55 to 74 year olds in the US set to increase by 15% by 2025. In the latest quarterly results net income was up 45% (although this was boosted by the acquisition of Jayco). The company also reported a huge backlog of orders at $2bn (almost 30% of annual revenue). With strong growth looking set to continue (forecast EPS growth c.11.4%) the current PE of 16.8 compares favorably to S&P 500 average ratio of 24. This is not advice to buy or sell. Please do your own research.

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