We live in a data driven age. Today data is being collected at every turn; from what you’re visiting online to the type of food you’re buying at the supermarket. Concurrently, data captured in decades prior is being unlocked to the public. This mass of data can be overwhelming, yet create various potential opportunities for idea seeking investors.
National Parks across the U.S. attract millions of domestic and foreign tourists annually. It’s a big business for the Park Services. Now, you can’t invest in the actual Park Service, which is part of the Federal government, but you can think about businesses that profit from increased tourism to National Parks. The first thing that comes to mind is outdoor sporting goods manufacturers and stores.
Changes in attendance to our National Parks, in my mind, reveal a larger trend that is occurring. If more people are visiting these parks, the general trend is likely the same for all general outdoor actives. Thus, their should be increased demand for outdoor gear and accessories. This is how trend tracking can lead you to investment ideas.
From the mid 90’s until 2014 you will notice a similar trend occurring within the three most popular National Parks in the U.S. In the mid to late 90’s Yosemite, Yellowstone and the Grand Canyon all experienced declines in visitation that continued for about 10 years. In the latter part of the first decade of the 2000’s, visitation began to increase and has continued to trend higher year after year.
What explains the change in the trend that happened in the 90’s and then reversed about 10 years later? I speculate that demographics played the most significant role. A large part of the echo-boom population was in or around their teenage years. This age range in general is not very interested in family vacations, especially the outdoor flavor. If you look back at the early 90’s and 80’s the attendance at these parks was experiencing growth. The demographic group was younger and more conducive to outdoors family functions. Fast forward to around 10 years ago and you find the echo-boomers starting families and thus a increase in attendance starts to occur at the parks; a signal that more outdoors activities are occurring.
I can only speculate what cause the trend to shift, but I do know that the current trend is for more year over year park visitations. This implies more outdoor activities happening across the country. If the general public behavior is shifting to more outdoor functions, then companies that provide such products for those functions are going to have an easier time growing their existing business. This creates a more hospitable climate for investors in such companies.
Where do you turn to when looking for pure plays in the outdoor recreation market? One option is Sportsman Warehouse Holdings (SPWH). SPWH operates 49 stores in 18 states that provide outdoor sporting goods including hunting, shooting, fishing and camping gear. It’s very well positioned to benefit from any increase in society’s inclination to venture into the great outdoors.
The bottom line is that piles of data are now accessible to us with the click of the mouse. A little work can reveal helpful observations that can lead us to achieving investment success.