Winnebago's Stock Has Biggest Day In 25 Years

Winnebago Industries, Inc. WGO stock revved higher Monday, leading to its biggest gain in nearly 25 years.

The RV manufacturer jumped on heavy volume after being upgraded by Baird, after news broke that Winnebago was set to buy Grand Design Recreational Co.

The deal is said to be "immediately accretive" to Winnebago's profit margins and EPS, and can generate significant cash flow to facilitate a debt reduction. The deal is worth approximately $500 million.

Winnebago likely followed in the footsteps of competitor Thor Industries Inc THO after completing a similar purchase of trailer and motor home maker Jayco Corp for $576 million in July. Since the purchase, Thor Industries is up nearly 24 percent.

Analysts at Baird said of the deal, "We missed an opportunity in Thor, and intend to avoid the same mistake here,"

Winnebago's stock is up 23 percent to $29.09 in today's session.