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Insider Buying Specialty Vehicle Maker with Spending Bill Tailwinds

by | Sep 9, 2021

REV Group (REVG) with a large insider buy on 9/9 as Director Paul Bamatter bought 50,000 shares at $15.17 for $758,500 and follows 50,000 shares bought at $15.20 on 6/21. REVG also saw notable call buying in June from the CEO and CFO. REVG shares are at an interesting level with shares recently basing above a rising 200-day moving average while below $17.15 which is a key volume node and VWAP from its 2017 IPO. REVG has a big volume pocket back to $24.50 above that level.

REV is a leading designer, manufacturer, and distributor of specialty vehicles and related aftermarket parts and services. Fire & Emergency, Commercial, and Recreation are its three primary segments. REVG provides customized vehicle solutions for applications, including essential needs for public services (ambulances, fire apparatus, school buses, and transit buses), commercial infrastructure (terminal trucks and industrial sweepers) and consumer leisure (recreational vehicles). Its products are sold to municipalities, government agencies, private contractors, consumers and industrial and commercial end users. The Recreation segment serves the RV market through the following principal brands: American Coach, Fleetwood RV, Holiday Rambler, Renegade RV, Midwest and Lance. REVG has been announcing partnerships as it works towards electrification of its specialty vehicles.

REVG has a market cap of $1B and trades 8.2X EBITDA, 10.2X Earnings and 17.2X FCF with a 1.3% yield. REVG revenues are seen rising 10.2% in 2021 and EBITDA increasing 123% while growth rates for 2022 seen at 4.2%/13.3% respectively. REVG has seen margin expansion and just announced a $150M buyback and has a record backlog of $2.7B. It highlighted additional growth from the $3.5T infrastructure bill noting “These 2 bills contain an additional $5 billion for electric vehicles and buses, $30 billion for modernizing public transportation and $80 billion to upgrade the power grid and install EV charging infrastructure.“

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