Mad Money

Polaris has a 'once-in-a-generation opportunity,' Jim Cramer says

Key Points
  • "If you believe, as I do, that America is reopening rapidly, but we're not exactly going back to normal — too much social distancing — then Polaris is indeed the kind of stock you should own," CNBC's Jim Cramer said.
  • "This is a company that benefits enormously from the V-shaped recovery thesis" and "works with a slower recovery," the "Mad Money" host said.
  • "Polaris is taking share, they're bringing in lots of new customers, and I think this is a once-in-a-generation opportunity for this company," he said.
VIDEO3:3303:33
Jim Cramer says Polaris is an ideal investment for this market environment

CNBC's Jim Cramer on Wednesday highlighted another outdoors-oriented stock that he thinks is sporting an attractive sell price.

Polaris, a manufacturer of snowmobiles, motorcycles, boats and other vehicles, is another way investors can play a leisure industry that has been turned on its head, the "Mad Money" host said.

"If you believe, as I do, that America is reopening rapidly but we're not exactly going back to normal — too much social distancing — then Polaris is indeed the kind of stock you should own," he said. "This is a company that benefits enormously from the V-shaped recovery thesis, and it also works with a slower recovery because the great outdoors is taking market share from every other form of recreation that involves crowded indoor spaces."

Cramer said he regrets not spotting the upside in the outdoor recreation industry months prior. Last week, he said that the camping and recreational vehicle companies are "back in a big way" in the age of Covid-19. Polaris, which finished Wednesday's session at $96.19, is still flashing a buying opportunity, he said.

Polaris shares have recovered all of their losses during the market meltdown that was triggered in February by the coronavirus outbreak. The stock fell about 60% from peak to trough and is now up more than 160% from its April lows.

The stock has pulled back 6% from the beginning of the trading week and is within $7 of its January closing high.

The camping and outdoor recreation space is catching Cramer's attention as an investment alternative to the airlines and cruise industries that face a boatload of new social distancing challenges to fill their crafts with passengers.

"Polaris is taking share, they're bringing in lots of new customers, and I think this is a once-in-a-generation opportunity for this company," Cramer said.

Polaris appears to have taken a "genuine turn" after reporting first-quarter earnings in April, Cramer said. The company missed analyst estimates on the top and bottom lines during the coronavirus-plagued quarter, but later management presented information that Cramer saw as encouraging.

In late May, Polaris announced it saw a rebound in business and that it would stick to its dividend. Chairman and CEO Scott Wine said he saw "unprecedented demand for our brands and vehicles." The company also made moves to give its balance sheet some wiggle room.

Cramer highlighted that the stock is selling for 17 times next year's earnings, which he deemed was not a bargain but that it was attractive for the 2.5% dividend yield.

"Put it all together, you got an incredibly bullish business update, a confirmation that the dividend is staying put and a lot more financial flexibility," he said.

VIDEO9:4809:48
Polaris is worth buying on a pullback, Jim Cramer says

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