No matter where you might put money to work in this market, the snowmobile business offers an important and potentially portfolio saving lesson for all investors.
"Good management makes an enormous difference in the performance of a stock," said Mad Money's Jim Cramer.
As the quintessential example Cramer pointed to the recent earnings from Polaris Industries and Arctic Cat, two manufacturers of snowmobiles and other off-road vehicles.
Largely the Street treated both stocks similarly, as bullish bets on the stronger consumer. However after their reports, sentiment shifted rather significantly.
"Arctic Cat produced an awful quarter while rival Polaris, "delivered a 3-cent earnings beat with higher than expected revenues," Cramer noted.
Digging down into earnings, the Street quickly realized that sales were very different at the two companies – though products were perceived to be relatively similar.
For example, "Polaris experienced a 25% increase in off-road vehicles. At Arctic Cat they were up just 4.3%," Cramer said.
Watch the entire video here.
Other metrics painted a similar picture; Arctic Cat's management just wasn't able to execute as effectively as the management team at Polaris.
Ultimately, shares of Arctic Cat tumbled – more than 10% in 5 days.
Cramer thinks the lesson is clear.
Source: CNBC
