Winnebago Industries, Inc.’s WGO shares gained 2.3% on Dec 1, after the company announced the acquisition of motorhome production facilities and equipment in Junction City, OR. Including all land, buildings, modifications, production equipment and technology infrastructure, this expansion is expected to cost the company around $15–$20 million.
Winnebago also acquired the intellectual property rights associated with Country Coach as part of the facility purchase. The company plans to revive the brand.
Additionally, Winnebago intends to shift the production of select diesel products to the new facility by the second half of 2017. This should help boost the production volume of Class A gas and Class C motorhomes at the company's headquarters in Forest City, IA. Further, the new facility will help increase the production of diesel products if there is a rise in demand in the future.
Winnebago’s Forest City facility had recently been under pressure due to increasing demand for the company’s motorhomes. This prompted the company to acquire the new facility.
Last month, Winnebago also signed an agreement to buy the property next to the Junction City facility. This property was once used for Country Coach operations. Winnebago intends to use the property to provide customer service to Country Coach as well as Winnebago owners.
Winnebago currently carries a Zacks Rank #4 (Sell). Some better-ranked automobile stocks include General Motors Co. GM, O'Reilly Automotive Inc. ORLY and Fox Factory Holding Corp FOXF, all carrying a Zacks Rank #2 (Buy).
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