Brunswick Corp. CEO Mark Schwabero appeared on “Mad Money” with Jim Cramer on CNBC last week to discuss the company’s stock and the way hurricanes affect the boating industry.
Brunswick’s stock has slid since the company’s most recent quarterly update, which showed a lag in larger-boat sales, which Cramer thought was an example of investors being shortsighted.
The stock’s three-month high, which came prior to the company’s second-quarter earnings release in July, was $63.40. The price slumped to $50.87 in August, but has since rebounded somewhat. (The stock opened at $53.14 today.)
“When you look at the quarter, the actual headline numbers were really pretty strong,” Cramer said. “I gotta ask, has Brunswick stock been punished enough? Did it even deserve to be punished in the first place?”
"The value of boats keeps going up. Consumers keep spending more and more to make it an enjoyable experience,” Schwabero said on the program.
Boats destroyed in hurricanes are typically replaced in about 12 to 18 months — after people affected by storms have dealt with more pressing issues.
Although not all replacements are new-boat purchases, used boats help to feed the parts and accessories part of the business, which accounts for about 15 percent of the company, Schwabero said.
“Big boats represent less than 4 percent of Brunswick’s revenue and even less of operating income,” Schwabero said. “So people focus on a very small portion of our portfolio.”