December 11th, 2017

4 TURNAROUND Stocks to Own for 2021

The travel industry has had to bear significant losses this year due to the pandemic. However, companies like Las Vegas Sands (LVS), Marriott (MAR), Hilton (HLT), and Allegiant (ALGT) are likely to rebound going into 2021 as the demand for travel-related services are expected to pick up with the coronavirus vaccines hitting the market.

The travel industry has been one of the worst hit industries due to the coronavirus pandemic. Occupancy rates in hotel rooms and flight bookings plummeted amid the health crisis. International flights were completely stopped in the beginning of the crisis and are yet to completely reopen.

However, the travel industry remains hopeful of a strong recovery with vaccines bringing the health crisis under control next year. There are several promising coronavirus vaccine candidates, which are expected to hit the market next year, speeding up the recovery process.

This is why several stocks in the travel and hotels industry are being seen as turnaround stocks. These stocks are currently underperforming, but could see significant gains once market conditions change.

Stocks like Las Vegas Sands Corporation (LVS), Marriott International (MAR), Hilton Worldwide Holdings, Inc. (HLT), and Allegiant Travel Company (ALGT) are turnaround stocks with high potential. These companies are continuing to invest in their growth and are well-poised to gain from a recovery in the travel industry once the pandemic subsides.

Las Vegas Sands Corporation (LVS)

LVS develops and operates integrated resorts in tourist destinations in Asia and the United States. The company’s resorts offer a range of amenities and facilities such as gaming, entertainment, celebrity chef restaurants, retail, and more. LVS’ stock has gained 50% since hitting its low in mid-March.

LVS is looking to enter new markets and has been working to develop properties in destinations such as Singapore and Macao. For the quarter that ended September 2020, the company reported an unrestricted cash balance of $2.4 billion, which indicates financial strength for the company until the travel industry rebounds.

LVS is expected to witness revenue growth of 25.6% for the quarter ending March 2021 and 174.2% in 2021. The company’s EPS is estimated to grow 766.7% for the quarter ending March 2021 and 175% in 2021.

LVS is rated a “Buy” in our POWR Ratings system, with a grade of “B” in Trade Grade. The stock is also ranked #6 out of 22 stocks in the Entertainment – Casinos/Gambling industry.

Marriott International (MAR)

MAR develops, operates, and licenses hotels and timeshare properties. The company has worldwide operations and is a leading brand in the luxury travel space. MAR’s stock has gained 71.7% since hitting its low in mid-March.

MAR has recently launched a new service called Marriott Bonvoy which provides tailor-made packages for people looking to work remotely at one of their hotel properties. Their new offering consists of a Day Pass, Stay Pass, and Play Pass. The company has also entered into an agreement with Magellan Development Group for the introduction of the St. Regis Hotels and Resorts brand to enter Chicago.

For the third quarter, the company added more than 19,000 rooms to their worldwide roster. This move signals the confidence of the company in the overall long-term health of the travel industry.

MAR is expected to witness revenue growth of 31.4% in 2021. The company’s EPS is estimated to grow 1641.2% in 2021.

MAR is rated a “Strong Buy” in our POWR Ratings system, with a grade of “A” in Trade Grade, Buy & Hold Grade, and Industry Rank. In the 14-stock Travel – Hotels/Resorts industry, it is ranked #4.

Hilton Worldwide Holdings, Inc. (HLT)

HLT develops, leases, franchises, and operates hotels and timeshare properties around the globe. The company operates through Hilton Hotels & Resorts, Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, Canopy by Hilton, Curio-A Collection by Hilton and other brand names. HLT’s stock has gained 68% since hitting mid-March lows.

Hilton has recently launched the Hilton CleanStay initiative which aims to make Hilton hotels the leading destination for holding events and conferences. The company has also signed a management license agreement with Country Garden to develop Home2 Suites by Hilton in China.

For the third quarter, the company approved 17,400 new rooms for development. The development pipeline of the company has increased 8% during the quarter, compared to the same period last year.

HLT is expected to see revenue growth of 54.3% in 2021. The company’s EPS is estimated to grow 863.6% in 2021.

HLT is rated a “Buy” in our POWR Ratings system, with a grade of “A” in Trade Grade. In the 14-stock Travel – Hotels/Resorts industry, it is ranked #5.

Allegiant Travel Company (ALGT)

ALGT operates a low-cost airline under the brand name Allegiant Air and also provides other travel-related services such as hotel rooms and rental cars. It is the ninth largest commercial carrier in the United States. ALGT’s stock has gained 137.7% since hitting its low in mid-March.

The company has recently announced the inclusion of fifteen new non-stop routes. The expansion also includes providing air travel services to two new cities which are Orange County, California and Spokane, Washington.

For the third quarter, the company reported that their scheduled capacity was down less than 7%. The company stated that they were focused on preserving cash through the current lean period.

ALGT is expected to see revenue growth of 43.4% in 2021. The company’s EPS is estimated to grow 135.3% in 2021.

ALGT is rated a “Strong Buy” in our POWR Ratings system, with a grade of “A” in Trade Grade, Buy & Hold Grade, and Peer Grade. In the 22-stock Airlines industry, it is ranked #2.

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LVS shares were trading at $56.69 per share on Friday morning, up $0.15 (+0.27%). Year-to-date, LVS has declined -16.25%, versus a 14.57% rise in the benchmark S&P 500 index during the same period.



About the Author: Aaryaman Aashind

Aaryaman is an accomplished journalist that’s passionate about providing in-depth insights about investing and personal finance. Recently he has been focused on the stock market and he specializes in evaluating high-growth stocks.

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