Uncertain Post-Pandemic Trends Are Creating Buying Opportunities

Investors always have to contend with uncertainty. And while the world has changed thanks to the pandemic, it’s clear that some trends are heading back to pre-pandemic ways. One such way is with travel. Both air travel numbers and other data indicate that consumers still want to travel, even with the risks involved.

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  • Nevertheless, short-term economic fears are now potentially weighing on that recovery. But such fears often prove unfounded in time. For now, that may be creating a buying opportunity.

    One such opportunity is with lodging companies. Hotel chains are continuing to post strong numbers. Marriott International (MAR) just reported an earnings beat, and even raised their annual guidance.

    Shares are up 11 percent over the past year, outperforming the S&P 500 by about 17 points. And the hotel chain has increased its profit margin to 38 percent. That outperformance looks like to continue as travel trends continue to rise.

    Action to take: Investors may like shares here, as the hotel chain just reinstated its dividend, with an initial annual payout of 0.75 percent. And even with the stock’s overall strong performance, it’s still down about 25 percent from its peak last year.

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  • For traders, the January $180 calls, last going for about $7.40, can potentially deliver mid-to-high double-digit gains in the months ahead on a further rally in shares.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.