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5 Summer Stocks to Take a Break From Geopolitics & Fed Hike

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There’s no time better than the summer to plan your vacation. Come next week and Americans will start packing their bags to make the most of the vacation season. According to an Airlines for America report, around 9 million more passengers are estimated to fly this season. And almost 46% of U.S. travelers will book trip at least four months in advance.

Understandably, budget for traveling has beefed up with higher wages, increased consumer spending and a higher number of millennials willing to spend more on vacationing this summer. Moreover, a bullish economy and high consumer confidence bode well for travel and leisure. Given this scenario, it makes for a good time to invest in travel and leisure stocks and beat the heat of market uncertainty caused by geopolitics, Fed rate hike and what not. 

Summer Vacation Picks Up

According to Generali Global Assistance's Travel Insurance, summer vacationing will be up 68% in 2018 from 61% in 2016. After a dip in 2016, summer vacationing has picked up in the last two years and the momentum will be felt again, starting this Memorial Day weekend.

Moreover, 48% of the travelers plan to spend time with family while holidaying, with 39% wishing to relax and during this time. According to Marriott International's newly released Second Annual U.S. Summer Travel Trends Report, 50% of Americans will be taking their longest vacation this summer.

Interestingly, domestic travel is on the rise this year, with 46% of travelers planning to vacation in the United States. That certainly means higher demand for hotels rooms, increased sales at restaurants, higher spend on leisure activities and more domestic air travel.

Millennials Drive Vacation Spend

Per Travelport Worldwide Limited (TVPT - Free Report) , more than one third Americans are planning to take a vacation this summer, with plans of two leisure trips on average. Also, per Generali Global Assistance's Travel Insurance, the average trip duration has increased 1.5 weeks this year.

Moreover, an average 246.1 million passengers are estimated to travel on U.S. airlines between Jun 1 and Aug 31, up 3.7% from the same period in 2017. Vacationing spend among Americans definitely will pick up this summer, with an increasing number of millennials willing to shell out more on trips.

More than half of the millennials (56%) have plans of taking more trips this summer compared with last year. Moreover, one third of the millennials don’t mind spending $5,000 on their vacation this year, the most by any age group.  

Our Choices

Vacationing during summer is on the rise thanks to a bullish economic outlook, higher wages, high consumer spending and consumer confidence. So it makes sense to add travel and leisure stocks to your portfolio at this point.

However, picking winning stocks may be difficult. We have narrowed down our search to the following stocks based on a good Zacks Rank and other relevant metrics.

Malibu Boats, Inc. (MBUU - Free Report)  operates as a designer, manufacturer and marketer of sport boats primarily in the United States. 

The company has expected earnings growth of 56.4% for the current year. The Zacks Consensus Estimate for the current year has improved by 8.4% over the last 30 days. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Las Vegas Sands Corp. (LVS - Free Report) is a hotel, gaming, and retail mall company headquartered in Las Vegas, Nevada. The company owns The Venetian Resort Hotel Casino, the Sands Expo and Convention Center, Venetian Interactive and Venetian Macao Limited. 

Las Vegas Sands Corpsports a Zacks Rank #1 and has expected earnings growth of 25.7% for the current year. The Zacks Consensus Estimate for the current year has improved by 12.4% over the last 30 days.

RCI Hospitality Holdings, Inc. (RICK - Free Report) owns and/or operates adult nightclubs that offer live adult entertainment, restaurant, and bar services. 

RCI Hospitalityhas a Zacks Rank #2 (Buy). The company has expected earnings growth of 52.5% for the current year. The Zacks Consensus Estimate for the current year has improved by 8.5% over the last 30 days.

SkyWest, Inc. (SKYW - Free Report)  is the holding company for two scheduled passenger airline operations and an aircraft leasing company.

SkyWesthas a Zacks Rank #2 and expected earnings growth of 35.3% for the current year. The Zacks Consensus Estimate for the current year has improved by 5.2% over the last 30 days.

Marriot Vacations Worldwide Corporation (VAC - Free Report)  is a developer, marketer, seller and manager of vacation ownership resorts and vacation club, destination club and exchange programs, principally under the Marriott and Ritz-Carlton brands and trademarks. 

Marriot Vacations has a Zacks Rank #2. The company has expected earnings growth of 22.3% for the current year. The Zacks Consensus Estimate for the current year has improved by 1.9% over the last 30 days.

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