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Should You Buy the Travel Stocks?

·3 min read
  • (0:20) - Where To Invest When Things Slowly Get Back To Normal

  • (3:30) - Will Travel Stocks Benefit The Most When The Economy Reopens

  • (7:20) - Tracey’s Top Stock Picks

  • (26:00) - Episode Roundup: PLYA, HT, EXPE, TRIP, TRVG, BKNG, RCL

  •                Podcast@Zacks.com


Welcome to Episode #226 of the Value Investor Podcast

Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.

In 2020, the travel and hospitality stocks were some of those hardest hit in the March coronavirus sell-off.

They remained somewhat depressed until November 2020, when Pfizer announced it had a vaccine that was over 90% effective and that it would be rolling it out by the end of 2020.

Now in 2021, there is the Pfizer and Moderna vaccines and the FDA is apparently close to authorizing the Johnson & Johnson vaccine as well.

There could be over 400 million doses of the vaccine available in the United States by July if all things go according to plan.

And many expect that to unleash pent-up travel demand.

Already, hotels and airlines, are seeing a change in consumer behavior.

Consumers are apparently looking at trips 3 to 6 months out. And they’re even booking airline tickets for 2 months out whereas in 2020, they were booking just days to 2 weeks out.

Should You Be Buying the Travel Stocks?

Hospitality companies will be big beneficiaries of the reopen.

But Wall Street has already been betting on it.

The hotel and OTA stocks have all soared.

1.       Playa Hotels & Resorts PLYA operates 21 all-inclusive hotels in Mexico, Jamaica and the Dominican Republic. Shares have soared 84% in the last 6 months.

2.       Hersha Hospitality Trust HT operates 40 high quality hotels in urban gateways and resort destinations such as Miami Beach, Key West and Santa Barbara. Shares are up 92% in the last 6 months.

3.       Expedia EXPE which operates red-hot VRBO, is hitting 5-year highs. Shares are up 75.3% in the last 6 months.

4.       TripAdvisor TRIP is expected to see positive earnings in 2021 with the Zacks Consensus looking for $0.40 versus a loss of $1.24 in 2020. Shares are up 127% in the last 6 months.

5.       Royal Caribbean Group RCL is one of the favorite re-open stocks. Shares are up 57% over the last 6 months but are still down 8.9% over the last year.  

Is it too late to buy the travel stocks or is the rally just getting started?

Find out the answer on this week’s podcast.

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Expedia Group, Inc. (EXPE) : Free Stock Analysis Report
Royal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report
TripAdvisor, Inc. (TRIP) : Free Stock Analysis Report
Hersha Hospitality Trust (HT) : Free Stock Analysis Report
Playa Hotels & Resorts N.V. (PLYA) : Free Stock Analysis Report
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