What are we looking for?
North American companies associated with the hotels, leisure and gambling industries that show strong price performance and profitability metrics.
The screen
With the weather getting warmer and the summer months almost upon us, vacation plans and resort getaways seem to be at the front of everyone's mind these days. While hotel and resort destinations can offer a small taste of paradise, they can also be a great addition to an investor's portfolio and can offer some excellent returns. Today's screen looks at North American companies found in the hotels and leisure global industry classification standard (GICS) – excluding restaurants – and seeks to identify and analyze strong trends in recent performance.
Companies must have a market capitalization of at least $1-billion (U.S.), a StarMine price momentum ranking of at least 80 (out of 100) and an operating margin of at least 10 per cent. Operating margin highlights profitability by showing the percentage of each dollar of revenue that is left over after operating expenses and cost of goods sold have been considered.
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What did we find?
ILG Inc. (formerly Interval Leisure Group) tops the results with an impressive price return of 43 per cent so far this year. The company, which operates as a global licensee for the Sheraton, Westin and Hyatt brands, reported results that beat expectations earlier this month and, with the recent opening of several new luxurious properties, should see higher sales as a result. Vail Resorts Inc., which made headlines to many Canadian investors in 2016 with its purchase of Whistler Blackcomb, scored strongly amongst its peers with an impressive price momentum score. With 11 of the 17 companies in the screen results having double-digit price returns year-to-date, this industry may be a hot spot at both the beach and in your portfolio.
This commentary does not provide individualized advice or recommendations for any specific subscriber or portfolio. Investors should conduct further research before investing.
Ryan Gottschalk is an account manager at Thomson Reuters.