A Stiff Breeze Behind Marine Max

Sales of pleasure boats are surging, but you wouldn't know it from the behavior of the stock of MarineMax (HZO), the nation's largest recreational boat dealer, with 53 outlets in 15 states. Its shares have bounced between 8 and 11 in the past 10 months. "The shares have drifted to a significantly undervalued level," argues analyst Annie Erner of Salomon Smith Barney, who rates the stock a buy. Now at 9 9/16, Marinemax is trading at six times Erner's 2000 earnings estimate of $1.45 a share. She thinks it is worth 19, or 13 times estimated 2000 earnings.

A Stiff Breeze behind MarineMax

The stock could hit the target, based on a boost in sales that could come from 23 acquisitions in MarineMax's pipeline. The acquisitions, adding 70 sales locations, would boost sales by $480 million a year, figures Erner. One dealership deal ready to be signed should add $15 million in annual sales in "the lucrative New Jersey and New York markets," says one money manager, who has been buying shares.

Several factors are helping buoy MarineMax sales, says Scott Barry, an analyst at Raymond James & Associates in St. Petersburg, where MarineMax is based. Consumer confidence is near historic high levels, he says, consumer spending continues to be strong, and, until recently, the stock market has been ebullient. And management's service-oriented approach, such as training sessions for boat buyers, "emphasize a positive boating experience," says Barry, who also rates the stock a "strong buy."