Financial analysis website Seeking Alpha released an article from a stock market watcher who questions just how much Marcus Lemonis trusts his own company. We reported that Lemonis recently dumped more than $8 million in Camping World Holding shares. Another “10 percent” shareholder, Abrams Capital, unloaded a whopping $47.8 million worth of shares last week. According to the Seeking Alpha post, Lemonis may be looking at “a rough road ahead” in the company’s financials. Is Camping World’s future in question?
Camping World’s future—at least in the near-term
The Seeking Alpha piece was written by Deep Value Investing, a self-described “deep value individual investor with a modest private investment portfolio.” The story says that this insider seller “suggests weak confidence in the near-term performance of the company.”
What’s behind the loss of confidence? The Seeking Alpha story first points out the obvious. Sales of used RVs have dropped like a stone, and to unload rigs, Camping World has had to heavily discount, cutting way back on profits.
The cost of interest paid to “floor” RVs is not helping the company. Camping World’s costs here are up almost 35% year over year. Adding another black mark on the stock, company revenue and operating income have moved downhill for seven quarters straight.
Does insider-selling really tell a story?
Deep Value Investing takes a contrary view to many when looking at insider selling. “Textbooks say that insider selling activity doesn’t provide any meaningful information on the outlook of a company,” says the piece. “However, I firmly disagree, especially when a CEO and a 10% owner sell a significant amount of their ownership (in the double digits).”
Additional “whys” as to Marcus Lemonis’ hesitation about Camping World’s future can be traced back to the company’s second quarter. Used rig sales dropped nearly 12%, while at the same time, revenue from those sales slipped nearly double—down nearly 22%. What’s behind that? The story answers, “Well, the simple answer is price erosion due to aggressive discounting. To put things in perspective, average selling prices of used RVs dropped 12.6% YoY.” It adds, “Essentially, Camping World has been selling fewer RVs, and the ones they sold were cheaper than last year.”
The dump in prices can be traced back to a lack of buyer interest. Camping World dealerships got caught with a lot of older inventory. To move it out, Lemonis’ crew cut prices significantly. Add in the high cost of flooring, or the interest paid to buy new rigs from manufacturers, and Camping World is caught in a bad corner.
The Seeking Alpha story points out, “This year alone, the CEO, Marcus Lemonis, sold over $10.7 million worth of shares, significantly reducing his ownership in the company. The latest transaction was on September 11, where he sold 71% of his ownership for $8.2 million.
“Abrams Capital Management followed just a few weeks later, with a 39% reduction in ownership, totaling $47.8 million in shares.”
“Investors have low confidence”
What does this all translate to in terms of Camping World insiders like Marcus Lemonis? The answer, “In my view, this insider selling activity is an indicator that management and institutional investors have low confidence in the current share price.” If Lemonis, and other big investors are really buying into the RV industry’s positive spin that “Happy days will be here again” in 2025, why the deep sell-off?
“I am not confident about the future growth of the company in the near term; therefore, I maintain a Hold rating,” concludes Deep Value Investing. Perhaps that writer has a slightly more positive view of the future than does Lemonis. A “hold rating,” suggests if you have the stock now, don’t sell it. But if you don’t have any, don’t buy any either.
##RVT1178b
Looks like CW’s previous sales, warranty and repair shop antics are coming back to haunt him. It’s a shame that he bought out so many good privately owned RV dealers only to run them into the ground. His slogan “If you’re not happy, I’m not happy” is a big joke.
It should have read: “If you’re not happy, I don’t care”. I called the hotline two times and both times all I got were excuses and no resolutions.
Consumer payback?
Thank you, Russ and Tina! 🙂 Is this right, that Lemonis sold 71% of his ownetship in Camping World? That is my understanding of the relevamt part of the story. If so, then perhaps the “wicked witch” is melting. 🤔😯😉😊 If so, the policies of Camping World may change, possibly benefitting consumers. I guess we’ll have to wait a good long while to know, but his decreased control might be beneficial. Have a great day and safe travels! 🙂
As some dance with delight the downturn in sales and how it may personally affect Lemonis , remember the recommendation of the so-called expert is to “Hold.” I have had several in that category over the past 4 years. Pfft.
And when the ass falls out of it, let’s see how much Lemonis pays for the share buy back.
Quite frankly the delight in this article about the economy destroying another industry is disgusting. I have zero business or connection to camping world, but a business loosing means job loss for the working soles.
I remember back a few years when Camping World bought out and owned Gander Mtn in Scranton Pa. Then after a couple years went out of business. When I was in the store it looked like they were having a reduction sale. I asked the sales man. He said he wasn’t aware of it. Just then a manager walked by and sales man asked him. Answer was yes we’re closing. Employee broke down in tears because he needed the job. Right then is when I had a dislike for Marcus Lemonis and CampingWorld.
I don’t get where “delight” is mentioned in the article. It’s about a market watcher that brings up “a loss of confidence” by CW and ownership. Yes, it’s sad and hurtful when a business folds due to the economy but unfortunately that’s reality.
Agreed.
Like any big company, Camping World is not without controversy or flaws but to celebrate demise of an American company is disheartening at best.
With all the frailties of humanity, the people that work there are taxpaying members of our community who are trying to enhance and embolden the RV community. Some are good at what they do, some not so much but to lump them all in a basket of hate is simply wrong and says more about the author than the accusation.
I don’t think it was so much the economy that destroyed CW. They flourished during the pandemic. It was more so the fact that customers were on their own after buying from CW.
Lemonis has his hands in too many other entities to care about customers.
“He is currently the chairman and CEO of Camping World, and Good Sam Enterprises, as well as the Chairman of Beyond. Additionally, he is renowned for his role as the star of The Profit, a CNBC reality show about saving small businesses. He is also the co-owner of Marcus/Glass Entertainment, which owns Let’s Make a Deal.”
The part of saving ‘small businesses’ is a joke. He bought out small privately owned dealers and destroyed them!
The “small privately owned dealers” didn’t have to sell, did they? I don’t recall reading a gun was held to their heads.
I wondered what was going on. Camping World built a beautiful, brand new store at the I-71 interchange in Delaware/Sunbury, OH. It has been sitting empty for the better part of a year now. I wonder if they’re trying to market the facility to another RV dealer?
I have been reading and donating for about 5 years.This is my first post. I’m an older female 7 years in the road and had a sunset park Sunlite and now 2018 Heartland Pioneer. Every single time I have stopped at Camping World for questions or service or supplies ,I have been ignored, or talked down to or just told they can’t help me. I stopped even trying their service 5 years ago. I just figured I’m obviously not an expensive camper buyer so not worth their time. Maybe I just got to a few bad apples. A change in leadership might help.
Given Camping World’s history of screwing people over, especially when it comes to warranty work and quality of service, combine that with a downturn in the RV market, and I’m somehow not surprised that this is happening. I feel sorry for the working schmucks who will be losing their jobs, though.
Marcus is just following the usual playbook. Buy up good small businesses, suck whatever cash and value of the goodwill built up by the founders and their employees over many years, focus on quarterly short term profits vs quality, hype the brand and outlook with the analysts to artificially inflate the share value. Sell off the shares before the consequences of the above come to light and pocket the profits regardless of the blood, sweat and tears from the efforts of loyal employees & customers and the impact on them. Wash rinse repeat with the next venture.
Of course, this is what we call a successful celebrity CEO or venture capitalist these days. I call them parasites.
Any chance he is setting the market before trying to “franchise” some stores?
I am no CW fan, but listening to a “market analyst” that self-admits to only having a modest portfolio doesn’t sound like a thorough investigation of CW.
As of yesterday’s close, their market capitalization was $1.89 BILLION. The sales by Lemonis and Abrams is a very small percentage in total. Looking back years, CW has always had wild swings in shares outstanding. While the stock price for the year is currently not at its high, it is UP 34.61% over Oct last year. It was up 2% just in the last week.
Again, I’m no CW fan, but the authors always seem to delight in cherry picking negatives and not in providing the full view of the business, which is what real journalists would do.
Good analysis.
CW has a bad reputation for after sales service. At best, it’s sketchy across dealerships and repair service can take weeks to months to complete.
CW doesn’t care about the customer after the sale. Also all the fees they charge on top of the sale price should be criminal. But it’s also the customer’s fault to put up with this type of shenanigans.
Sold all of our 100k stocks as soon as we read Lemonis sold stock.
Understanding only the minimum basics of Marcus’ investments I believe he doesn’t want all or most of his assets in one company. (Eggs in one basket) Me too!
Not only that, but without details of his CEO stock plan, he may have gotten a load of shares and needed cash, so sold them right away.
When Lou Gerstner was CEO of IBM he used to do two $50M stock sales a year. His CEO deal with IBM was that he bought at a VERY low price and could immediately sell (at market). The total number of shares he could do was limited and he got those options 2X annually. Even though IBM did great under his exceptional leadership, he didn’t buy and hold…he bought and sold.
Net, there is a lot one needs to know about officers of a Corp. and their buying and selling habits before jumping to wild conclusions about motives.