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Renowned strategist Tom Lee recommends 12 beaten-down travel stocks to buy now for an average profit of 32% during the pandemic recovery

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  • Social-distancing guidelines have battered travel stocks from airlines to casinos. 
  • Tom Lee, the head of research at Fundstrat Global Advisors, sees early signs that travel activity is recovering. 
  • He identified 12 companies that have a "very high" ability to manage six feet of distancing among their guests.
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Social distancing is one of the most effective ways to contain the spread of the coronavirus. But it is also the travel industry's worst nightmare.

People have been forced to rethink trips within their own cities, not to mention vacations to faraway destinations. 

The pandemic is hurting the industry far and wide, from airlines to casinos and rental-car companies. Even the oracle of Omaha himself Warren Buffett disclosed last weekend that he dumped his entire stake in airline stocks in April.

All told, the S&P Transportation Select Industry Index is down 29% this year and underperforming the S&P 500 by 18%.   

But there are early signs that travel activity is recovering, according to Tom Lee, the head of research at Fundstrat Global Advisors.

In a recent note, he cited numbers from travel-data provider Adara showing that leisure trip bookings for solo and couple travelers — 42% of US households — are ticking higher. 

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Another indicator of a gradual recovery in travel is investors demand for newly issued Boeing debt. The aircraft manufacturer sold $25 billion in bonds in late-April — the largest offering this year according to Bloomberg —  and sidestepped the need for federal assistance.

If indeed the recovery is underway, companies that can reasonably enforce distancing stand to benefit the most, Lee said. This definitely rules out cruise ships because they are still considered a petri dish of the disease.

Lee narrowed it down to two sectors with a "very high" ability to manage distancing: time shares and hotels. Their rooms allow people to be isolated, and they are rethinking how shared dining operates, he added. 

He singled out the Russell 1000 stocks below as having an average of 32% upside should they achieve a 62% retrace of the February to March decline, matching the S&P 500's move within that timeframe.

SEE ALSO: 'Beware of the oddity': A Wall Street firm studied every market crash over the last 150 years to reveal how abnormal this one is — and concluded that stocks are doomed for another fall

1. BBX Capital

Ticker: BBX

Percent off 2020 high: -54%

62% retrace upside: 57%

Source: Fundstrat



2. Wyndham Destinations

Ticker: WYND

Percent off 2020 high: -52%

62% retrace upside: 53%

Source: Fundstrat



3. Bluegreen Vacations

Ticker: BXG

Percent off 2020 high: -47%

62% retrace upside: 41%

Source: Fundstrat



4. Hilton Grand Vacations

Ticker: HGV

Percent off 2020 high: -41%

62% retrace upside: 24%

Source: Fundstrat



5. Marriott Vacations Worldwide

Ticker: VAC

Percent off 2020 high: -36%

62% retrace upside: 13%

Source: Fundstrat



6. Red Lion Hotels

Ticker: RLH

Percent off 2020 high: -56%

62% retrace upside: 71%

Source: Fundstrat



7. Marriott International

Ticker: MAR

Percent off 2020 high: -40%

62% retrace upside: 28%

Source: Fundstrat



8. Hyatt Hotels

Ticker: H

Percent off 2020 high: -39%

62% retrace upside: 27%

Source: Fundstrat



9. Hilton Worldwide Holdings

Ticker: HLT

Percent off 2020 high: -34%

62% retrace upside: 21%

Source: Fundstrat



10. Choice Hotels International

Ticker: CHH

Percent off 2020 high: -31%

62% retrace upside: 17%

Source: Fundstrat



11. Extended Stay America

Ticker: STAY

Percent off 2020 high: -27%

62% retrace upside: 7%

Source: Fundstrat





* This article was originally published here Press Release Distribution

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