You Need a Vacation (Stock)

Mike Larson

I met my wife on a cruise ship operated by Royal Caribbean Cruises (RCL, Rated “B”). So maybe I’m a bit biased. But I think you might need a vacation … stock.

Just check out the year-to-date performance of some of the largest cruise line, hotel, resort, and casino companies. This Leading Vacation Stocks Screener I created (using the tools you get as a member of Weiss Platinum; Click here to sign up ) shows that they’ve been on fire …

Data Date: 5/10/2017

Right at the top of the list is the aforementioned Royal Caribbean. The stock is up more than 29% year-to-date, and 45% in the last 12 months.

It got an added boost recently when the company said first-quarter profits surged to $214.7 million, or 99 cents per share, from $99.1 million, or 46 cents per share, in the year-earlier period. That easily beat the consensus estimate for 92 cents per share, helped by strong Caribbean cruise demand.

The hotel chain Wyndham Worldwide (WYN, Rated “B-”) just beat first-quarter earnings forecasts, too, as did Marriott International (MAR, Rated “B”). Solid bookings, fatter margins, and increased REVPAR – revenue per available room – helped both companies. They’ve easily beaten the 7.8% YTD return of the SPDR S&P 500 ETF (SPY, Rated “B”), with gains of 26.8% and 17.8%.

The story is the same for destination resort companies like Vail Resorts (MTN, Rated “B+”) and Las Vegas Sands (LVS, Rated “C”). Their shares have advanced 24.5% and 11.1%, respectively, just since the start of the year. The former has benefitted from industry consolidation while the latter is basking in the glow of improved Las Vegas and Macau gaming results.

So can the strong performance continue? Well, with many of these travel stocks up so much already, any minor disappointment can lead to pullbacks. We saw it last week when Priceline Group (PCLN, Rated “B”) fell a few percentage points after the online travel company provided slightly weaker-than-expected guidance.

But employment is growing at a healthy clip, consumer confidence is rock-solid, and executives in the industry continue to sound upbeat. Even sector laggards like the Walt Disney Co. (DIS, Rated “B”) are struggling only because of extraneous issues. In its case, problems at the ESPN television network due to “cord cutting” by cable customers take the blame. Operating income at Disney’s parks and resort division actually surged 20% in the fiscal second quarter.

So if you’re sick of watching the broad market tread water, check out shares of travel stocks. You may find smoother sailing there.

Until next time,

Mike

P.S. Speaking of travel, I’ll be heading out West and up North for two investor conferences later this year. The first is the MoneyShow San Francisco, which runs from August 24-26, 2017, and the second is the MoneyShow Toronto, which runs from September 8-9, 2017.

I’d love to meet you there, and for you to check out my presentations and seminars. The events are completely free to attend; Just be sure to register in advance by clicking here for San Francisco and clicking here for Toronto. Or you can call 1-800-970-4355 to reserve your spot(s).

Mike Larson, Senior Analyst

ETF Spotlight Edition, by Mike Larson, Senior Analyst

Mike Larson is a Senior Analyst for Weiss Ratings. A graduate of Boston University, Mike Larson formerly worked at Bankrate.com and Bloomberg News, and is regularly featured on CNBC, CNN, Fox Business News and Bloomberg Television as well as many national radio programs. Due to the astonishing accuracy of his forecasts and warnings, Mike Larson is often quoted by the Washington Post, Chicago Tribune, As-sociated Press, Reuters, CNNMoney and many others.

About the Income & Dividend Analyst

In an era of high-risk exuberance, Mike Larson stands out as a leader in conservative investment strategies that outperform the market overall. Using the safety-oriented Weiss Ratings as a guide, he has a proven history of guiding investors to stocks and ETFs that provide asset protection, consistent dividends and excellent growth.

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