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Five Lodging Stocks to Buy Boost Prospects with Strong Demand

Five lodging stocks to buy boost prospects with strong consumer demand and little exposure to the effects of Russia’s ongoing invasion of Ukraine. The…

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1 year ago

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Five lodging stocks to buy boost prospects with strong consumer demand and little exposure to the effects of Russia’s ongoing invasion of Ukraine.

The five lodging stocks to buy warrant acquiring before their share prices recover further from their current reduced valuations, according to BofA Global Research. With leisure and resort demand strong or stable, the outlook seems encouraging, despite the continuing risk of the war and the Fed’s plan to keep raising interest rates in 2023 to slow both economic and employment growth.

While the management of lodging companies are conscious of the toughening macro backdrop, none have seen any material sign of slowing demand, according to BofA. Executives of most lodging companies pointed to sustained leisure demand, the return of group business and improvements in transient business activity aiding third-quarter results. Bookings, leads and meeting planner activity all remain healthy, BofA reported in a recent research note.

“Most companies expect Q4 demand to look similar to Q3, and noted healthy trends through October,” according to BofA. “Several called out accelerating occupancy in October relative to September/Q3. The average 4Q outlook — for those providing it — is +2.9% ahead of 2019.”

Five Star Trader Advisory Service Forecasts Further Growth Ahead 

The Five Star Trader advisory service led by free-market economist Mark Skousen, PhD, reported on Dec. 6 that the gross output (GO) statistic, which measures total spending in the economy, is proving to be more accurate than gross domestic product (GDP) in assessing the economy’s strength. While real GDP, factoring in inflation, declined in the first two quarters of 2022, real GO continued to climb, indicating that there was no recession, Skousen wrote.

The value of the supply chain continues to boom, despite shortages, Skousen advised his subscribers. Although Skousen is not currently recommending a lodging stock, he has in the past and may again in the months ahead. However, job creation is growing, and unemployment is still under 4%, as labor shortages remain, price inflation continues at the retail level and the U.S. government runs massive deficits, he added.

More than 70 million Social Security recipients will receive an 8.7% increase starting this month, so inflation is not going away, projected Skousen, who also heads the Forecasts & Strategies investment newsletter.

“Wall Street is fearful that continued real growth means that the Federal Reserve will push for higher interest rates, and that’s why stocks have sold off over the past few days,” Skousen apprised subscribers of his investment trading service. “The danger is always that the Fed overreacts, as it has done in the past, raising interest rates too high.”

Mark Skousen, a scion of Ben Franklin and leader of Five Star Trader, meets Paul Dykewicz.

Five Lodging Stocks to Buy Feature Who’s Who of Hospitality Industry

Three of the five lodging stocks to buy pay dividends but all of them are listed as buys, according to a recent BofA research note. Internationally, Europe has performed much better than expected in the third quarter, while China could offer an opportunity in 2023, despite volatility partially caused by its zero-COVID policy and periodic strict lockdowns that have led to public protests.

Courtesy of www.StockRover.com. Learn about StockRover by clicking here.

Las Vegas-based Caesars Entertainment Inc. (NASDAQ: CZR) received a $65 price objective from BofA, based on a valuation multiple in line with the lodging company’s long-term historical average. Catalysts to potentially beat that projected share price gain mainly revolve around management significantly exceeding its forecast through marketing reductions, gains in underlying revenue by regionals or Las Vegas operations, sports betting, opportunistic asset sales, land sales, joint ventures and licensing deals, and a faster-than-expected recovery following the COVID-19-related casino closures.

Risks to achieving the BofA price target include high financial and operating leverage used to fund the 2020 combination of Caesars Entertainment, Inc. and Eldorado Resorts, Inc. to form the largest gaming company in the United States. Additional risk stems from whether a cost reduction model can work in a market as competitive as Las Vegas, BofA wrote. Prolonged industry headwinds related to COVID-19 could further exacerbate these factors.

Caesars Entertainment, Inc.’s resorts operate primarily under the Caesars, Harrah’s, Horseshoe, and Eldorado brand names, offering diversified gaming, entertainment and hospitality amenities. The company also aims to provide one-of-a-kind destinations and online gaming and sports betting experiences.

Chart courtesy of www.StockCharts.com

Five Lodging Stocks to Buy Feature Hilton Worldwide

Hilton Worldwide (NYSE: HLT), of McLean, Virginia, obtained a $160 price objective from BofA, based on a premium to historical multiples for this type of hotel business due to improving share gains and a leaner and more efficient business model. The lodging company is expected to sustain historically high earnings before interest, taxes, depreciation and amortization (EBITDA), BofA added. The price objective also is in line with a midcycle multiple on recovery earnings discounted back to 2022 estimates, according to BofA.

Risks to reaching the price objective include greater-than-expected economic weakness, leading to declines in travel demand, greater-than-expected delays in hotel development — possibly slowing system growth, worse-than-expected consumer spending to cause a possible dip in demand for timeshares and any acts or threats of terrorism, BofA cautioned.

Chart courtesy of www.StockCharts.com

Hyatt Hotels Gain Place Among Five Lodging Stocks to Buy

Chicago-based Hyatt Hotels (NYSE: H) received a $110 price objective from BofA, based on a valuation below more “asset-light peers” such as Hilton. BofA views Hyatt as a way to chase the lodging cycle recovery and sees several positives: majority exposure to fee-based revenue, strongest net unit growth (NUG) in the sector, recovery potential and operating leverage through group and corporate-owned-hotel exposure, incentive management fee recovery and valuation multiple expansion

BofA’s price target could be exceeded due to possible catalysts that include Hyatt’s asset sales exceeding expectations, acquisition of Apple Leisure Group providing additional upside, group recovery, pent-up demand coming back stronger than expected in second-half 2022 and net unit growth continuing to outperform lodging c-corp peers. Key risks to the price goal are maintaining significant exposure to China, which may face headwinds to COVID policies, COVID cases pushing return to office further out and acting as a headwind to corporate travel, a heavy exposure to the luxury segment, which has lagged the rest of the industry, BofA wrote.

Chart courtesy of www.StockCharts.com

At the beginning of November, Hyatt reported a strong third-quarter performance. The company’s recent acquisition of the Apple Leisure Group, a luxury resort management service company, made the difference, said Michelle Connell, a former portfolio manager who now leads Dallas-based Portia Capital Management. The acquisition allowed Hyatt to double its global resort footprint.

As of now, 70% of Hyatt global portfolio is in the luxury and upscale hospitality segment. This bodes well, as the luxury consumer has not pulled back on travel spending, Connell opined.

Business travel has started to recover from the pandemic, with 2022 about even to Hyatt’s pre-pandemic and 2023 looking strong, Connell continued. Group booking revenue for the third quarter of 2022 ended just 3% below 2019 levels.

Group travel bookings and reservations for the third quarter of 2023 are 30% ahead of 2019 levels, Connell continued. Asia, including China, has been strong for Hyatt and future prospects look even better, she added.

As of the second quarter of 2022, Hyatt’s revenue per room in China was 15 points higher than in 2019, Connell advised. China is 10% of the company’s revenue and 5% of its profits, she added.

“Due to the region’s strength, Hyatt it is in the process of continuing to build out its luxury brand presence in Asia, excluding China,” Connell said. Plus, Hyatt has a solid cash balance of almost $3 billion. Cash is spent on stock repurchases and debt reduction, added Connell, who estimates Hyatt’s share price could jump 15-20% in 2023.

Michelle Connell heads Portia Capital Management, of Dallas, Texas.

Marriott International Makes List of Five Lodging Stocks to Buy

Bethesda, Maryland-based Marriott International (NASDAQ: MAR) is one of the premier global hotel companies, said Bob Carlson, a pension fund chairman who also leads the Retirement Watch investment newsletter. The lodging chain, located in a neighboring suburb to where I live in Maryland, has the distinction of operating brands across all income levels and through its hotels around the world.

Marriott also pioneered the model of owning few hotels, Carlson recalled. Instead, the company earns fees for franchising its brands and managing hotels under contract to property owners. The company has one of the top loyalty programs in the industry, giving it an advantage with travelers and hotel owners looking for partners, he added.

Since the company owns little real estate and has low debt, Marriott is something of a “pure play on growth in travel,” Carlson counseled. Its fees rise quickly as occupancy increases but can decline rapidly in a downturn, he continued.

Marriott is a “solid long-term” investment on travel and is likely to increase market share around the globe, Carlson told me.

Bob Carlson, investment guru of Retirement Watch, talks to Paul Dykewicz.

BoA set a $190 price objective on Marriott, based on approximately 16x its 2023E EBITDA estimate, a premium to historical multiples for this type of hotel business but in line with the group due to depressed interest rates. The price objective is also in line with a midcycle multiple on recovery earnings discounted back to 2022E.

Downside risks to BofA’s price objective are: 1) greater-than-expected economic weakness, which may lead to declines in travel demand, 2) the potential for terrorism, which may make individuals more reluctant to travel, 3) greater-than-expected delays in new hotel development, which may slow growth in Marriott’s system, and 4) worse-than-expected business/consumer spending, which may lead to declines in overall travel demand.

Chart courtesy of www.StockCharts.com

Wyndham Wins Place Among Five Lodging Stocks to Buy

Wyndham Hotels & Resorts, Inc. (NYSE: WH), of Parsippany, New Jersey, gained a $85 price objective from BofA, showing a discount to the valuation of its peers such as Hilton, Marriott and Rockville, Maryland-based Choice Hotels International (NYSE: CHH), while in line with the long-term average of asset-light lodging C-corps. BofA wrote that the multiple is warranted given Wyndham’s competitive advantage in scale and stability in earnings from its pure franchised business.

“We think the market is discounting WH to factor in a historically significant amount of deletions every year, offset by a business that’s almost entirely fee-based,” BofA wrote. “The price objective is also in line with a midcycle multiple on recovery earnings discounted back to 2022E.”

Potential catalysts to outperform BofA’s price target are an accelerating revenue per available room (RevPAR) environment, driven by better macroeconomic data, greater-than-expected margin expansion and net-unit-growth (NUG) ahead of expectations. The price target could be missed due to potential headwinds such as greater-than-expected economic weakness that may hurt travel demand, longer-than-expected delays in hotel development that could slow system growth and worse-than-expected business and consumer spending that could cause declines in overall travel demand.

Chart courtesy of www.StockCharts.com

COVID-19 Will Not Crush Five Lodging Stocks to Buy

The U.S. Center for Disease Control and Prevention recommended wearing a mask to prevent the spread of COVID-19, a nasty strain of the flu and serious respiratory virus. CDC Director Dr. Rochelle Walensky said doing so can reduce the chance of catching or spreading such viruses.

Indeed, flu and respiratory syncytial virus are spreading at high levels in the United States at the same time COVID is picking up, stressing hospital emergency departments. Walensky also urged everyone who is eligible to receive a bivalent booster and a flu shot.

China’s economy experienced COVID-19-related weakening due to lockdowns that curbed exports and imports more sharply than expected in November. Weak global and domestic demand, public protests about the county’s zero-COVID policy and a real estate slump are slamming the world’s second-biggest economy.

China’s police patrolled streets, checked cell phones and called some demonstrators to warn them against continuing their civil unrest. That response reduced protests about the country’s zero-COVID policy that is slowing economic growth and had led many people to oppose the controversial lockdown policy of China’s leader Xi Jinping. China’s authorities may be starting to pay attention to the concerns of its citizens by slightly easing the current draconian lockdowns that are bogging down supply chains.

COVID-19 cases in the United States totaled 99,077,996 and deaths climbed to 1,082,224, as of Dec. 6, according to Johns Hopkins University. America has the dubious distinction of amassing the most COVID-19 cases and deaths of any nation. Worldwide COVID-19 deaths hit 6,644,670 people, while total cases reached 646,328,326, Johns Hopkins reported on Dec. 6.

The U.S. Centers for Disease Control and Prevention reported that 267,346,533 people, or 80.5% the U.S. population, have received at least one dose of a COVID-19 vaccine, as of Nov. 30. People who have completed the primary COVID-19 doses totaled 228,369,460 of the U.S. population, or 68.8%, according to the CDC. The United States also has given a bivalent COVID-19 booster to 37,885,266 people who are age 18 and up, accounting for 14.7% of the U.S. population in that age group.

None of the five lodging stocks to buy have much exposure to fallout from Russia’s invasion of neighboring Ukraine on Feb. 24 and the persistent shelling and missile attacks since then. Even though Russia’s leaders call that assault on Ukraine a “special military operation,” the five lodging stocks to buy are focused on serving customers who have money to spend on travel and are not immediately affected by the killing of an estimated 100,000 on both sides of the continuing conflict that shows no signs of ending soon.

Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, Guru Focus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Special Holiday Offer: Paul is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The book is great holiday gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others. Call 202-677-4457 for special pricing on multiple-book purchases.

The post Five Lodging Stocks to Buy Boost Prospects with Strong Demand appeared first on Stock Investor.

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate…

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1 hour ago

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March 9, 2024

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.

(Shutterstock)

A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.

Long COVID Patients Have Low Iron Levels

Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.

In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.

According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.

But it can jeopardize a person’s recovery.

“When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”

The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.

“It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”

The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.

1 in 5 Still Affected by Long COVID

COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.

Tyler Durden Sat, 03/09/2024 - 12:50

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Walmart joins Costco in sharing key pricing news

The massive retailers have both shared information that some retailers keep very close to the vest.

Published

4 hours ago

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March 9, 2024

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As we head toward a presidential election, the presumed candidates for both parties will look for issues that rally undecided voters. 

The economy will be a key issue, with Democrats pointing to job creation and lowering prices while Republicans will cite the layoffs at Big Tech companies, high housing prices, and of course, sticky inflation.

The covid pandemic created a perfect storm for inflation and higher prices. It became harder to get many items because people getting sick slowed down, or even stopped, production at some factories.

Related: Popular mall retailer shuts down abruptly after bankruptcy filing

It was also a period where demand increased while shipping, trucking and delivery systems were all strained or thrown out of whack. The combination led to product shortages and higher prices.

You might have gone to the grocery store and not been able to buy your favorite paper towel brand or find toilet paper at all. That happened partly because of the supply chain and partly due to increased demand, but at the end of the day, it led to higher prices, which some consumers blamed on President Joe Biden's administration.

Biden, of course, was blamed for the price increases, but as inflation has dropped and grocery prices have fallen, few companies have been up front about it. That's probably not a political choice in most cases. Instead, some companies have chosen to lower prices more slowly than they raised them.

However, two major retailers, Walmart (WMT) and Costco, have been very honest about inflation. Walmart Chief Executive Doug McMillon's most recent comments validate what Biden's administration has been saying about the state of the economy. And they contrast with the economic picture being painted by Republicans who support their presumptive nominee, Donald Trump.

Walmart has seen inflation drop in many key areas.

Image source: Joe Raedle/Getty Images

Walmart sees lower prices

McMillon does not talk about lower prices to make a political statement. He's communicating with customers and potential customers through the analysts who cover the company's quarterly-earnings calls.

During Walmart's fiscal-fourth-quarter-earnings call, McMillon was clear that prices are going down.

"I'm excited about the omnichannel net promoter score trends the team is driving. Across countries, we continue to see a customer that's resilient but looking for value. As always, we're working hard to deliver that for them, including through our rollbacks on food pricing in Walmart U.S. Those were up significantly in Q4 versus last year, following a big increase in Q3," he said.

He was specific about where the chain has seen prices go down.

"Our general merchandise prices are lower than a year ago and even two years ago in some categories, which means our customers are finding value in areas like apparel and hard lines," he said. "In food, prices are lower than a year ago in places like eggs, apples, and deli snacks, but higher in other places like asparagus and blackberries."

McMillon said that in other areas prices were still up but have been falling.

"Dry grocery and consumables categories like paper goods and cleaning supplies are up mid-single digits versus last year and high teens versus two years ago. Private-brand penetration is up in many of the countries where we operate, including the United States," he said.

Costco sees almost no inflation impact

McMillon avoided the word inflation in his comments. Costco  (COST)  Chief Financial Officer Richard Galanti, who steps down on March 15, has been very transparent on the topic.

The CFO commented on inflation during his company's fiscal-first-quarter-earnings call.

"Most recently, in the last fourth-quarter discussion, we had estimated that year-over-year inflation was in the 1% to 2% range. Our estimate for the quarter just ended, that inflation was in the 0% to 1% range," he said.

Galanti made clear that inflation (and even deflation) varied by category.

"A bigger deflation in some big and bulky items like furniture sets due to lower freight costs year over year, as well as on things like domestics, bulky lower-priced items, again, where the freight cost is significant. Some deflationary items were as much as 20% to 30% and, again, mostly freight-related," he added.

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Walmart has really good news for shoppers (and Joe Biden)

The giant retailer joins Costco in making a statement that has political overtones, even if that’s not the intent.

Published

5 hours ago

on

March 9, 2024

By

As we head toward a presidential election, the presumed candidates for both parties will look for issues that rally undecided voters. 

The economy will be a key issue, with Democrats pointing to job creation and lowering prices while Republicans will cite the layoffs at Big Tech companies, high housing prices, and of course, sticky inflation.

The covid pandemic created a perfect storm for inflation and higher prices. It became harder to get many items because people getting sick slowed down, or even stopped, production at some factories.

Related: Popular mall retailer shuts down abruptly after bankruptcy filing

It was also a period where demand increased while shipping, trucking and delivery systems were all strained or thrown out of whack. The combination led to product shortages and higher prices.

You might have gone to the grocery store and not been able to buy your favorite paper towel brand or find toilet paper at all. That happened partly because of the supply chain and partly due to increased demand, but at the end of the day, it led to higher prices, which some consumers blamed on President Joe Biden's administration.

Biden, of course, was blamed for the price increases, but as inflation has dropped and grocery prices have fallen, few companies have been up front about it. That's probably not a political choice in most cases. Instead, some companies have chosen to lower prices more slowly than they raised them.

However, two major retailers, Walmart (WMT) and Costco, have been very honest about inflation. Walmart Chief Executive Doug McMillon's most recent comments validate what Biden's administration has been saying about the state of the economy. And they contrast with the economic picture being painted by Republicans who support their presumptive nominee, Donald Trump.

Walmart has seen inflation drop in many key areas.

Image source: Joe Raedle/Getty Images

Walmart sees lower prices

McMillon does not talk about lower prices to make a political statement. He's communicating with customers and potential customers through the analysts who cover the company's quarterly-earnings calls.

During Walmart's fiscal-fourth-quarter-earnings call, McMillon was clear that prices are going down.

"I'm excited about the omnichannel net promoter score trends the team is driving. Across countries, we continue to see a customer that's resilient but looking for value. As always, we're working hard to deliver that for them, including through our rollbacks on food pricing in Walmart U.S. Those were up significantly in Q4 versus last year, following a big increase in Q3," he said.

He was specific about where the chain has seen prices go down.

"Our general merchandise prices are lower than a year ago and even two years ago in some categories, which means our customers are finding value in areas like apparel and hard lines," he said. "In food, prices are lower than a year ago in places like eggs, apples, and deli snacks, but higher in other places like asparagus and blackberries."

McMillon said that in other areas prices were still up but have been falling.

"Dry grocery and consumables categories like paper goods and cleaning supplies are up mid-single digits versus last year and high teens versus two years ago. Private-brand penetration is up in many of the countries where we operate, including the United States," he said.

Costco sees almost no inflation impact

McMillon avoided the word inflation in his comments. Costco  (COST)  Chief Financial Officer Richard Galanti, who steps down on March 15, has been very transparent on the topic.

The CFO commented on inflation during his company's fiscal-first-quarter-earnings call.

"Most recently, in the last fourth-quarter discussion, we had estimated that year-over-year inflation was in the 1% to 2% range. Our estimate for the quarter just ended, that inflation was in the 0% to 1% range," he said.

Galanti made clear that inflation (and even deflation) varied by category.

"A bigger deflation in some big and bulky items like furniture sets due to lower freight costs year over year, as well as on things like domestics, bulky lower-priced items, again, where the freight cost is significant. Some deflationary items were as much as 20% to 30% and, again, mostly freight-related," he added.

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