Put the Key in the Ignition

In mid-April, we saw an interesting insider purchase over at motor-home maker Winnebago (WGO). On the heels of an 87% Winnebago stock surge over the prior year, board member Mark Schroepfer picked up 4,000 shares -- half at about $18 and the other half near $17.50. This piques our interest, because names bought by insiders tend to slightly outperform the market -- which we believe is because insider buying indicates high confidence in the company, since it entails ratcheting up company-specific risk.

Winnebago's fiscal second-quarter sales (ended February) climbed 35% and, from the start of the year, sales were tracking 41% higher overall. With little change in operating expenses, the company reported a $6.3 million second-quarter profit -- up from a small loss a year earlier -- and income of slightly under $14 million for the first half. That comes out to $0.48 per share, and annualizing that figure gives us a price-to-earnings multiple of 18x at the current market capitalization of about $480 million....346 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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