Lodging Stocks Can Help You Stay Ahead of Holiday Season Rush

Lodging Stocks Can Help You Stay Ahead of Holiday Season Rush

Research  these Stocks on Kapitall’s Playground Now

 
research now

All eyes are on the lookout for stocks that will outperform during the holiday season. In addition to retail sales,which we dive into here, there are several industries such as travel, lodging and grocery chains, that stand to benefit during Thanksgiving, and Christmas. For this article we wanted to give investors a looks into the lodging sector.

There are 7 US lodging stocks with market caps above $300 million – a lower limit we establish to make sure we are looking at sizable firms. We list them all here and mark where any have come up in our bullish and bearish screens

Notably, 2 came up as having significant levels of net institutional selling in the current quarter.  Are institutions, such as hedge funds, selling these stocks because of weak fundamentals or for purely technical reasons? Two came up as having account receivable flags, and 1 with encouraging trends.

Two stocks came up as “undervalued” as per the Levered free cash flow/ enterprise value ratio.Levered free cash flow is the free cash flow after deducting interest payments on outstanding debt. Enterprise value is the sum of the firm’s value from all ownership sources: market cap, outstanding debt, and preferred shares. When companies have ratios of levered free cash flow/enterprise value in excess of 10%, it may indicate that the company as a whole is being undervalued

Business Section: Investing Ideas

Here are the 7 largest US lodging stocks, listed in detail along with any relevant information investors should note before taking action. Use this list as a starting point for your own analysis, and let the links below help further your research.

 

1. Choice Hotels International Inc. (CHH, Earnings, Analysts, Financials): Operates as a hotel franchisor worldwide. Market cap at $1.79B, most recent closing price at $30.85.

This stock came up as more profitable than its industry peers: Trailing Twelve Month gross margin at 44.2% vs. industry average at 35.97%. TTM operating margin at 28.29% vs. industry average at 18.4%. TTM pretax margin at 25.17% vs. industry average at 16.41%.

Undervalued by EPS trends – there is a mismatch between current price and EPS: The EPS estimate for the company’s current year increased from 1.93 to 2.03 over the last 30 days, an increase of 5.18%. This increase came during a time when the stock price changed by 0.22% (from 31.3 to 31.37 over the last 30 days).

Encouraging Accounts Receivable Trends:  Revenue grew by 9.41% during the most recent quarter ($210.41M vs. $192.32M y/y). Accounts receivable grew by 0.65% during the same time period ($66.2M vs. $65.77M y/y). Receivables, as a percentage of current assets, decreased from 31.35% to 30.84% during the most recent quarter (comparing 3 months ending 2012-09-30 to 3 months ending 2011-09-30).

 

2. Expedia Inc. (EXPE, Earnings, Analysts, Financials): Operates as an online travel company in the United States and internationally. Market cap at $7.54B, most recent closing price at $55.88.

Undervalued by LFCF/EV: Levered free cash flow at $839.58M vs. enterprise value at $6.68B (implies a LFCF/EV ratio at 12.57%).

 

3. Ryman Hospitality Properties, Inc. (RHPEarningsAnalystsFinancials): Market cap at $1.43B, most recent closing price at $31.53. Until 2012, the company was known as Gaylord Entertainment Company, and earlier as Gaylord Broadcasting Company.

Accounts Receivable Flag: Revenue grew by 1.29% during the most recent quarter ($228.13M vs. $225.23M y/y). Accounts receivable grew by 21.05% during the same time period ($60.37M vs. $49.87M y/y). Receivables, as a percentage of current assets, increased from 39.02% to 43.29% during the most recent quarter (comparing 3 months ending 2012-09-30 to 3 months ending 2011-09-30).

 

4. Hyatt Hotels Corporation (H, Earnings, Analysts, Financials): Engages in the management, franchising, ownership, and development of Hyatt-branded hotels, resorts, and residential and vacation ownership properties worldwide. Market cap at $5.55B, most recent closing price at $33.82.

Accounts Receivable Flag: Revenue grew by 8.92% during the most recent quarter ($977M vs. $897M y/y). Accounts receivable grew by 148.62% during the same time period ($542M vs. $218M y/y). Receivables, as a percentage of current assets, increased from 12.91% to 28.89% during the most recent quarter (comparing 3 months ending 2012-09-30 to 3 months ending 2011-09-30).

 

5. Starwood Hotels & Resorts Worldwide Inc. (HOT, Earnings, Analysts, Financials): Operates as a hotel and leisure company worldwide. Market cap at $9.91B, most recent closing price at $50.55.

Net institutional selling: Net institutional sales in the current quarter at -11.5M shares, which represents about 5.9% of the company’s float of 194.84M shares.

 

6. Marriott International, Inc. (MAR, Earnings, Analysts, Financials): Operates and franchises hotels and related lodging facilities worldwide. Market cap at $10.76B, most recent closing price at $34.11.

Net institutional selling:  Net institutional sales in the current quarter at -16.1M shares, which represents about 6.84% of the company’s float of 235.52M shares.

Undervalued by LFCF/EV: Levered free cash flow at $1.52B vs. enterprise value at $13.62B (implies a LFCF/EV ratio at 11.16%).

 

This stock did not trigger our screens:

 

7. Wyndham Worldwide Corporation (WYN, Earnings, Analysts, Financials): Provides various hospitality products and services to individual consumers and business customers in the United States and internationally. Market cap at $6.87B, most recent closing price at $48.98.

 

 

 

Analyze These Ideas: Getting Started

Dig Deeper: Access Company Snapshots, Charts, Filings

New to Kapitall?

1. New to the site? Click here to register for a free account, and gain access to more tools and data
2. Looking for more investing ideas like this? Click here to sign up for your free copy of Kapitall Weekly
3. Follow us on SeekingAlpha, Motley Fool, Nasdaq and Twitter

 

playfor100kwirebanner2png

Leave a Reply

Protected by WP Anti Spam

playfor100kwirebannerpng