馃攳
Three Buys and a Bail: MAR, CHH, AXP & CCL - YouTube
Channel: CNBC Television
[0]
travel stocks have seen some wild swings
[2]
over the past two years first slumping
[4]
then soaring then slumping again post
[7]
pandemic the cruise lines are now
[8]
trading back at the same levels we saw
[10]
in early 2020 when the pandemic first
[12]
hit so which names here are the buys and
[15]
where should you bail in the travel
[16]
sector let's ask gina sanchez with
[18]
today's three buys and a bail she is
[20]
chantico global ceo and a cnbc
[22]
contributor gina welcome your first
[24]
couple buys have a common theme here the
[26]
first one is marriott we teased it
[27]
earlier down 26 percent from the highs
[30]
why are you a buyer
[34]
so marriott right now is one is a stock
[36]
that is you know they've been
[38]
telegraphing that they have very very
[39]
strong occupancy and that occupancy is
[41]
continuing to improve
[43]
and one of the things that i said even a
[45]
long time ago when we were in the middle
[46]
of the pandemic is if you want to take
[48]
your family on a vacation the only thing
[50]
that qualifies it is a vacation is a
[52]
hotel you can skip the plane you can
[54]
skip everything else as long as you get
[56]
to a hotel the kids are happy and i
[58]
think that's going to be the theme this
[59]
summer as people are trying to save
[60]
money marriott has a fantastic offering
[64]
obviously but they also are less they
[67]
they're they're better valued than some
[68]
of the other
[69]
hotels like hilton or hyatt you know
[72]
they're trading at 13 times that's
[73]
actually pretty attractive right now
[75]
concerned about the
[77]
whether we call it an actual recession a
[79]
technical recession you know the loss of
[81]
consumer real income growth and spending
[84]
power
[87]
yeah you know that's that is an issue
[90]
obviously and and you know if you if you
[92]
look at marriott it also benefits from
[95]
business spending where you have a
[96]
little less um you know it's not quite
[99]
as elastic as as consum consumer
[102]
spending but even there you're hearing
[104]
companies that are kind of
[106]
uh reducing their travel budgets as well
[109]
but marriott uh is a beneficiary and
[112]
again you know they have strong cash
[114]
flow they have a good balance sheet they
[116]
have good debt to ebitda and so the
[118]
company itself is just positioned to
[120]
weather this volatility because they're
[122]
getting both the business travel as well
[124]
as um as individual travel
[127]
and their balance sheet is good all
[129]
right let's turn then sticking with the
[131]
hotel space but to a different name
[132]
choice hotels this is your second buy
[134]
it's down 25 this year and they recently
[136]
announced an acquisition of the radisson
[138]
hotel brand is that deal making part of
[140]
the attractiveness here
[143]
absolutely and part of the reason that
[145]
they're able to do that deal making
[146]
kelly is because they have an extremely
[148]
strong balance sheet if you look at
[149]
their debt to ebitda they're probably
[150]
one of the best in the industry so
[152]
they're in a position to be taking
[154]
advantage of the volatility and
[157]
expanding their line the other
[158]
interesting thing about choice hotels is
[160]
because it's it's you know this is like
[161]
you know choice this is clarion this is
[164]
a little lower down the food chain so
[166]
it's it's more affordable for people uh
[168]
to come and stay there it's more of a
[170]
family hotel
[171]
it also has probably some of the biggest
[173]
margins in the business it's 40 margins
[176]
that's not that's not bad
[178]
and so you know all of the things line
[180]
up for them to be able to deal with
[182]
rising inflation pressures etc and just
[186]
they have a really really strong balance
[187]
sheet yeah pat patia's the ceo we've had
[189]
on a number of times here as well all
[191]
right finally a name that is a financial
[193]
i guess technically but doubles as a
[195]
travel name amex down only 14 this year
[198]
it's held up well uh but again we have
[200]
recession and sort of consumer concerns
[202]
lingering
[205]
yeah you know the the you know the
[207]
question is well will the kind of loss
[210]
of consumer spending hit the credit
[212]
cards but the other side of the credit
[214]
cards is the rise in interest rates is
[215]
actually benefiting them um and so you
[218]
know we actually like all of the credit
[219]
cards we own visa and mastercard at lido
[222]
advisors but american express is one of
[224]
those that's just gotten a bump up by by
[226]
you know a few of the analysts and if
[229]
you look at the outlook it's a little
[230]
more it's a little better priced um it's
[233]
got all of the it checks all of the
[235]
boxes it's got you know great margins
[238]
it's got a good balance sheet um and so
[240]
you know we're sort of banking on the
[242]
fact that what they lose in consumption
[244]
they're going to gain on the interest
[245]
rate play and vice versa when we go when
[248]
we get to the other side of this they'll
[249]
also be pretty well positioned um you
[252]
know to sort of keep participating on
[254]
the consumption side so what you lose in
[256]
one you're gaining in the other and you
[258]
do need some interest rate protection in
[260]
your portfolio interesting and they're
[261]
ford pe under 15 as well here all right
[264]
those are your three buys let's move on
[266]
to the bail and it's carnival which has
[268]
already been under a tremendous amount
[269]
of pressure one of the worst most
[271]
emblematic names of the return to the
[272]
pandemic trade it's back to april 2020
[275]
levels that was just a few weeks after
[277]
the cdc's no sale order
[279]
yes it's a top five performer in the s p
[281]
today it's extremely high beta it's
[283]
always amongst it feels like the top or
[286]
the bottom names depending on the market
[288]
why is this one a bale for you
[291]
so for us you know you've probably heard
[294]
this theme now i've said it a few times
[295]
we're really looking at the balance
[297]
sheet of some of these companies to say
[298]
okay if we do go into sort of more
[300]
difficult times who's got the balance
[302]
sheet to support it all of the cruise
[304]
lines really fell into a really really
[307]
bad space because they because of the no
[309]
sail order
[311]
and they're also incredibly expensive to
[313]
operate and so even just you know
[315]
docking the ships is incredibly
[317]
expensive the maintenance doesn't stop
[319]
even if you're running the ships you're
[321]
dealing with fuel costs and so you know
[323]
they're really getting hit on all sides
[325]
finding labor inflationary pressures in
[328]
wages fuel costs none of that bodes well
[331]
you look at their margins and right now
[333]
their margins obviously are negative
[334]
because they're not making any money
[336]
and they just are carrying a massive
[337]
debt load that they need to figure out
[339]
what to do with into in a recession
[341]
that's really what you want to avoid
[343]
yeah debt obviously that needs to be
[344]
refinanced at higher rates that won't
[346]
help as well quickly are you bearish on
[349]
all of the cruise names um
[351]
and i should know none of your buys were
[353]
you know airlines or or the kind of
[356]
travel travel part of this market
[360]
no you know the reason for that kelly is
[362]
because we are concerned about the fact
[364]
that uh oil prices are just staying high
[367]
longer um than even we expected and the
[371]
longer those oil prices stay high
[373]
it's going to pressure margins on
[375]
anybody that has to buy any kind of fuel
[377]
so it's why we sort of
[378]
headed towards the the uh the hotel
[381]
names uh in the travel space um you know
[383]
the cruise lines right now they just a
[386]
lot of them actually have quite negative
[387]
balance sheets and it's just a hard
[390]
place for us to get comfortable
[391]
um so it's that's really been the reason
[394]
why we've stayed away i mean those guys
[395]
just had a double whammy and that they
[396]
were carrying tons of debt and they were
[399]
getting hit by all the inflationary uh
[401]
pressures exactly all right gina sanchez
[403]
thank you so much we appreciate it three
[405]
buys and a bail on the travel space
[407]
today
Most Recent Videos:
You can go back to the homepage right here: Homepage