Morning Trade for April 28th 2021

Stocks were flat this morning as investors digested a deluge of major tech earnings numbers and geared up for the latest Fed decision.  While no rate changes are expected, investors are anxious to hear any news on when the weaning-off process will begin.

Our trade alert for today highlights a well-established small-cap with a sparkling reputation in an industry with a momentous increase in demand expected in the coming years.  

Brownstone Research:

Jeff Bezos Just Poured $10 Billion Into This…

Not many people know this story… But in 1998, Bezos invested $250,000 of his own money in Google, when the company was just getting started out of a garage in California. When Google went public in 2004, that $250,000 investment translated into 3.3 million shares of Google stock. Nobody knows if Bezos has sold any shares. If he hasn’t, today they’re worth more than $5.6 billion.Jeff Bezos is betting big on a new trend. This time he’s planning to invest $10 billion of his own money in this exciting new trend. That’s 40,000 times more money than what he invested in Google. That’s how big he thinks this could be. [Full Story…]

Lazydays Holding Inc. (LAZY) is an iconic brand in the RV industry, recognized as the #2 dealership brand in the country.  Since 1976, Lazydays has established a reputation by offering a vast selection of RV brands from the nation’s leading manufacturers, state-of-the-art service facilities, and thousands of accessories and hard-to-find parts.  Lazydays features new and pre-owned RVs, service bays and on-site campgrounds. The company also has rental fleets in Florida, Arizona and Colorado.

The company currently has 13 locations and is focused on scaling platform and expanding their footprint nationally within attractive, high priority regions.  Last year, Lazydays opened their first dedicated service center, a 30,000 sq. ft. state-of-the-art facility in Houston, TX.  And just last month added a new location in Nashville, TN.  The company’s growth pipeline continues to be robust. Lazydays completed three acquisitions in 2020 and is evaluating multiple new growth opportunities including acquisitions and buildouts.  Management believes the company is well positioned to further consolidate within a fragmented market.

Last week, Lazydays released preliminary first quarter results.  The company saw a 32% increase in RV sales over the same period last year.   Revenue was $271 million, up 42% or $80 million versus first quarter 2020 and net income was $15 million, up $12.1 million versus first quarter 2020.  Adjusted EBITDA increased 192% to $27.8 million versus $9.5 million in the first quarter of 2020.  This is an all-time quarterly EBITDA record for Lazydays, surpassing the previous record of $19 million set in the third quarter of 2020.  

Management also gave an update for second quarter 2021, stating that demand continues to be strong and pending sales backlogs remain at historically high levels.  Customer demand remains strong and inventory levels are well below the prior year.  OEM shipments are improving as more and more Americans are becoming vaccinated and returning to work, so as demand grows, inventory is becoming more accessible.  

RV life is gaining popularity among ‘baby boomers’ and has become a viable retirement option for many among this demographic, who control more than 70% of the disposable income in the U.S.  By 2025 there are expected to be more than 79 million consumers between the ages of 55 – 74.  Considering Lazydays proven commitment to its customers and shareholders alike, would you consider an investment in this small-cap darling?