Since @ToffCap linked to this (mostly dormant) account, I might as well explain why I'm getting really bullish on Brunswick $BC right now. 👇1/n

Brunswick's core product is outboard propulsion for sports boats. They operate in what is historically a duopoly with Yamaha ($7272.jp). We all know boats require service and $BC and $7272 are the only companies with the global distribution to provide this service.

Boats are big ticket items and you'd expect sales to suffer during a consumer recession. US Sports boat sales were 186k in 2019, 214k in 2020, 200k in 2021, 200k in 2022 and $BC guidance is based on a 170k assumption for 2023. However, $BC is still growing earnings this year.

This is partly because of the high % of recurring income: ~42% of revenue and ~50% of earnings is from after-market. Brunswick has an extensive parts & accessories business. An outboard engine needs to be serviced once a year, or after every 100 operating hours.

But $BC is also gaining massive market share. Outboard engines win share from stern drive, and within outboard, $BC is winning share from $7272.jp who dropped the ball during Covid and had major supply chain issues. No one will sell your engine if you can't service it.

More importantly, $BC products are now much better than $7272 engines. Go to any $HZO dealer and they'll sell you a Mercury engine. $BC makes the only 600hp engines. The $BC 300hp engine is V8, vs V6 for at $7272.jp, and only $BC offers a 3-year corrosion warranty.

Mercury now has a ~47% US market share, up 600bps since 2019. They recently added new manufacturing capacity, which pushes both volumes and margins in the last Q.

$BC also manufactures popular boat brands such as Sea Ray and Boston Whaler. Importantly, they just expanded margins to >10%, while pure plays such as $MBUU are at >15%.

$BC also makes 'boat gadgets' such as Navico navigation systems or joysticks to dock your boat without crashing. $BC's own branded boats are usually first to market with the new tech.

So we have an extremely high quality company who is gaining share rapidly, with 50% recurring income. The market incorrectly assumes that their earnings growth was cyclical. In reality, it is based on US boat sales assumptions 30k below 2022, and 16k below 2019.

@roojoo3 Where can you find market share data for Recreational Boats without paying for $2k for NMMA data?

@HarsheelD Not sure you can, but you can compare $BC growth rates (for boats) with industry growth rates.

@roojoo3 Great thread. And on the technical side there are several potential support points… its 50 AND 200 week m.a. around $76, its 50 month ma around $74, uptrend line support around $73. So it would be easy to know where to bail if it would begin to break below these.