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Leisure Industry Hit By Coronavirus: 3 Stocks Defying Carnage

Zacks Equity Research

The coronavirus pandemic has so far claimed thousands of lives across the globe and brought governments to their knees. Apart from disrupting daily lives and straining the global health care system, the virus outbreak has left businesses around the world in a lurch. In order to counter this menace, governments and local administration authorities have enforced full or partial lockdown measures and advocated social distancing to curb the spread as much as possible.

Cruise Stocks Sinking

The cruise industry, which is one of the fastest-growing categories in the leisure travel market, has taken a massive hit owing to stringent restrictions. Markedly, the $45 billion industry made the decision to suspend operations from U.S. ports of call for 30 days with the Trump administration imposing significant travel embargoes on passengers from 26 European countries.

Major cruise companies that have been affected by these prohibitory orders include Carnival Corporation CCL and Norwegian Cruise Line Holdings Ltd. NCLH. With more and more passengers being tested positive for COVID-19, these Zacks Rank #5 (Strong Sell) stocks have decided to halt operations of multiple cruise lines, thereby extending the suspension of all voyages till May. Consequently, shares of Carnival and Norwegian Cruise Line have plunged 33.2% and 12.9% in yesterday’s trading session to close at $8.80 and $9.55, respectively. Needless to say, bookings for the broader business are also going to be negatively impacted, thanks to severe travel restrictions.


 

Top 3 Leisure Stocks

However, there are certain leisure stocks that are bucking the trend despite all adversities. Given the intense market volatility, investors can expect to profit from these picks, which are well poised to gain from strong business fundamentals and solid Zacks Rank.

Camping World Holdings, Inc. CWH: With a market cap of $502.1 million, Camping World offers products and services for recreational vehicle enthusiasts. Based in Lincolnshire, IL, the company is focused on executing a back-to-basics strategy with more closures of outdoor retail stores amid the global pandemic. Moreover, it is leaving no stone unturned to ensure the safety of employees. Impressively, Camping World intends to provide financial assistance to ones, who are experiencing personal and financial difficulties as a result of the COVID-19 pandemic.

Sporting a Zacks Rank #1 (Strong Buy), the company has a healthy dividend yield of 5.6%. The Zacks Consensus Estimate for the current and next year earnings is pegged at 21 cents and 63 cents, respectively. Signifying an inherent growth potential, the estimates represent a year-over-year improvement of 163.6% and 200.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Twin River Worldwide Holdings, Inc. TRWH: With a market cap of $410.7 million, Twin River Worldwide is a gaming company, which is involved in the operation of various casinos and racetrack properties in Mississippi, Colorado and Delaware. Headquartered in Rhode Island, the company recently sought to employ furloughed casino workers and also confirmed that it has sufficient liquidity to meet all of its obligations in the face of the coronavirus adversity. On the employee front, the company has also established a separate fund to provide financial assistance and health coverage to employees who are encountering severe hardships during the shutdown period.

Twin River Worldwide sports a Zacks Rank #1. With a dividend yield of 3.1%, the Zacks Consensus Estimate for the current and next year earnings has improved an impressive 41.2% and 44.5%, respectively, over the last 60 days.

Manchester United plc MANU: With a market cap of $610.6 million, Manchester United is a professional sports club, which is headquartered in Greater Manchester, the U.K. The company manages various club affiliated activities of its football club, which includes fan zone, team merchandise and media network with news and sports features.

The Zacks Rank #2 (Buy) company has a long-term earnings growth expectation of 22.8%. The Zacks Consensus Estimate for the current and next year has improved 133.3% and 36.4%, respectively, over the last 60 days. The stock topped earnings estimates thrice in the trailing four quarters. It has a trailing four-quarter positive earnings surprise of 89.9%, on average.

Summing Up

With the pandemic aggravating with each passing day, it is crucial for the governments of various countries to act promptly to tide over the situation. Countries globally are taking extreme measures to impose quarantines, shut airports and seal international borders in an attempt to limit the catastrophic losses. Notably, premier cruise companies are also changing sailing itineraries and extending “Cruise with Confidence” cancellation policy through Sep 1, 2020. In such an hour of crisis, investors are likely to benefit from some priceless leisure stocks that stand tall among the ruins.

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Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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