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5 Reasons to Add Vail Resorts (MTN) to Your Portfolio Now

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Vail Resorts, Inc. (MTN - Free Report) is one of the leading resort operators in North America. The company operates through three segments: Mountain, Lodging, and Real Estate. This Zacks Rank #2 (Buy) company has solid fundamentals and should make a value addition to your portfolio

What Makes Vail Resorts a Solid Pick?

Stock Price Movement: Shares of Vail Resorts have rallied 17.8% year to date, outperforming the Zacks categorized Leisure and Recreation Services industry’s gain of 11.8%. While any stock can see a spike in price, it takes a real winner to consistently outperform the market. Similarly, we noticed that Vail Resorts has outperformed the industry in each of 4-week, 12-week and 52-week time frames as well.



Moreover, the Return on Equity delivered in the trailing 12 months was an impressive 16.3%, while the industry gained 8.3%. This indicates that Vail Resorts reinvests more efficiently compared with its peers.

Besides, the company is also confident about the strong cash flow generation and stability of its business model. It thus remains committed to returning capital to shareholders.

Earnings & Revenue Growth: Vail Resorts makes for a great pick in terms of Growth investment. Arguably, nothing is more important than earnings growth as surging profit levels is often an indication of strong prospects (and stock price gains) for the company in question.

While Vail Resorts has a historical earnings per share (EPS) growth rate of 31.6% compared with the industry average of 14.1%, investors should really focus on its projected growth. The company is looking to grow at a rate of 36% higher than the industry average of 14.2%.

Propelling the earnings forward is the company’s solid revenue growth story. Notably, projected sales growth for the current year is 19.8%, which is higher than the broader industry’s estimate of 3.2%.

For all these reasons Vail Resorts currently has a Growth Score of ‘A’ on our style score system that helps us to identify potential outperformers.

Low Beta Stock: A stock with beta less than 1 suggests that the price movement of the stock is not highly correlated with the market. Since they are less volatile than the market, they are safer bet at the moment. In this context, Vail Resorts has a beta of 0.52. Therefore adding it to your portfolio will bring down the overall beta, thereby reducing its risk.

Estimate Revisions: Over the past 60 days, fiscal 2017 and 2018 earnings estimates have moved up 4.6% and 5.8%, respectively. These positive earnings estimate revisions testifies the unwavering confidence that analysts have in the company and also adds to the optimism.

VGM Score: Vail Resorts has a VGM Score of 'B'. Our VGM Score identifies stocks that have the most attractive value, growth, and momentum characteristics. In fact, our research shows that stocks with VGM Scores of 'A' or 'B' when combined with a Zacks Rank #1 or 2 make solid investment choices.

Other Stocks to Consider

Other favorably-placed stocks in the broader Consumer Discretionary sector include Marcus Corporation (MCS - Free Report) , Pool Corp. (POOL - Free Report) and Pinnacle Entertainment, Inc. . While Marcus and Pool sport a Zacks Rank #1 (Strong Buy), Pinnacle Entertainment carries the same Zacks Rank as Vail Resorts. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Marcus’ 2017 earnings climbed 7.9%, over the past 60 days. Further, for 2017, EPS is expected to grow 10.3%.

The Zacks Consensus Estimate for Pool’s 2017 earnings climbed 7.1%, over the past 60 days. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 19.93%.

The Zacks Consensus Estimate for Pinnacle Entertainment’s 2017 earnings climbed more than 100% over the last 60 days. Further, for 2017, EPS is anticipated to increase in excess of 100%.
 
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