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Welcome to Episode #73 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
In this episode, Tracey is joined by John Blank, Zacks Chief Equity Strategist and Editor of Zacks Large Cap Trader, for a discussion about the travel industry under the Trump Administration.
Trump’s Impact on Mexico Tourism
Both Tracey and John recently took vacations to Mexico, with John traveling by car down the Baja and Tracey flying into Playa del Carmen on the Yucatan peninsula.
John traveled to see the gray whales and was surprised to see that many of the boats that should have been full with nature-loving tourists, mostly from Europe, were empty.
Tracey talked to a restauranteur in town who said that business plunged in January after Trump’s initial executive order restricting travel from 7 countries and after the Trump Administration’s comments about free trade and building the wall.
US Tourism Could Lose Too
Back in the United States, New York City has already said it could lose 300,000 tourists a year thanks to negative sentiment about traveling to the United States.
Additionally, some economists estimate that between $50 billion and $70 billion could be lost due to tourists deciding not to visit America. That could impact thousands of jobs.
With all of this uncertainty, is now a good, or a bad, time to be investing in the travel stocks?
Tracey and John look at the online travel agents as well as a few of the airlines.
Investment Ideas in the Travel Industry
1. Priceline is the king of online travel. Shares have been hitting new all-time highs and trade with a forward P/E of 23, but it still has double digit earnings growth. Is it still a buy?
2. Expedia (EXPE - Free Report) is more expensive, at 30x, but its earnings growth is also stronger than Priceline’s. Earnings are expected to rise 22.6% in 2017 and another 37.5% in 2018. Watch for an upward revision in earnings estimates as it’s a Zacks #5 (Strong Sell) right now.
3. Southwest (LUV - Free Report) has blamed bad weather in California for a slowing this quarter. When does that ever happen?
4. American Airlines (AAL - Free Report) is one of the cheaper domestic carriers with a forward P/E of 9. But should you be buying domestic or international airlines, or neither, right now?
5. International Airlines Group (ICAGY - Free Report) might not be familiar to you, but you would know its brands. It flies about 550 aircraft under the British Airways, Iberia, Aer Lingus and Vueling logos. Europe’s economy is heating up. When the economy is stronger, people travel more.
Another area to look for ideas in are the timeshare companies. Yes, timeshare companies are again seeing record revenue. In spite of a challenge from Airbnb, consumers are still buying timeshares.
There are other travel areas investors should consider including the cruise ship companies and hotel chains.
What else do Tracey and John think about the travel industry and investing in 2017?
Find out the answer to this and more on this week’s podcast.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>
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Trump and Travel Stocks: A Winning Combination?
Welcome to Episode #73 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
In this episode, Tracey is joined by John Blank, Zacks Chief Equity Strategist and Editor of Zacks Large Cap Trader, for a discussion about the travel industry under the Trump Administration.
Trump’s Impact on Mexico Tourism
Both Tracey and John recently took vacations to Mexico, with John traveling by car down the Baja and Tracey flying into Playa del Carmen on the Yucatan peninsula.
John traveled to see the gray whales and was surprised to see that many of the boats that should have been full with nature-loving tourists, mostly from Europe, were empty.
Tracey talked to a restauranteur in town who said that business plunged in January after Trump’s initial executive order restricting travel from 7 countries and after the Trump Administration’s comments about free trade and building the wall.
US Tourism Could Lose Too
Back in the United States, New York City has already said it could lose 300,000 tourists a year thanks to negative sentiment about traveling to the United States.
Additionally, some economists estimate that between $50 billion and $70 billion could be lost due to tourists deciding not to visit America. That could impact thousands of jobs.
With all of this uncertainty, is now a good, or a bad, time to be investing in the travel stocks?
Tracey and John look at the online travel agents as well as a few of the airlines.
Investment Ideas in the Travel Industry
1. Priceline is the king of online travel. Shares have been hitting new all-time highs and trade with a forward P/E of 23, but it still has double digit earnings growth. Is it still a buy?
2. Expedia (EXPE - Free Report) is more expensive, at 30x, but its earnings growth is also stronger than Priceline’s. Earnings are expected to rise 22.6% in 2017 and another 37.5% in 2018. Watch for an upward revision in earnings estimates as it’s a Zacks #5 (Strong Sell) right now.
3. Southwest (LUV - Free Report) has blamed bad weather in California for a slowing this quarter. When does that ever happen?
4. American Airlines (AAL - Free Report) is one of the cheaper domestic carriers with a forward P/E of 9. But should you be buying domestic or international airlines, or neither, right now?
5. International Airlines Group (ICAGY - Free Report) might not be familiar to you, but you would know its brands. It flies about 550 aircraft under the British Airways, Iberia, Aer Lingus and Vueling logos. Europe’s economy is heating up. When the economy is stronger, people travel more.
Another area to look for ideas in are the timeshare companies. Yes, timeshare companies are again seeing record revenue. In spite of a challenge from Airbnb, consumers are still buying timeshares.
There are other travel areas investors should consider including the cruise ship companies and hotel chains.
What else do Tracey and John think about the travel industry and investing in 2017?
Find out the answer to this and more on this week’s podcast.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>