Up about a third since the election and up more than 100% from its 52-week low, Drew Industries (NYSE:DW) has received plenty of love this year. A lot of this attention is deserved - the company has continued to deliver on its pledges to improve content, leverage underlying market growth, and improve margins, as well as continue to cautiously expand into adjacent markets.
Strong performance expectations are built into Drew's share price today, but there are still opportunities for growth. Management has shown that it can identify and secure growth opportunities in its core market, and if it can execute with similar skill in newer markets like buses, trucks, and marine, Drew could be a substantially larger company and still offer some upside. That said, there's a lot of risk in a story that's predicated on repeating old success in new markets, and I'd prefer a wider margin of safety.
Readers should also note that Drew Industries has announced a name change. Starting in 2017, Drew Industries will be known as "LCI Industries," with the symbol changing to LCII.
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Drew Industries Shooting Up On Content Growth, Margins, And Industry Growth