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7 Travel Stocks to Buy Just In Time for Beach Season

travel stocks - 7 Travel Stocks to Buy Just In Time for Beach Season

Source: Shutterstock

Talk about pent up demand. Travel, whether for work or pleasure, has been squeezed near an inch of its life in the past year. But times are changing.

Domestically, travel is becoming normalized again. People are willing to stay in hotels and resorts again. Crowds are no longer something to fear. People can actually mix with people again.

And that is going to be a big boost for travel stocks. Many stocks have already scored some big gains in anticipation. But some are currently consolidating, waiting for the numbers to reflect their anticipated growth.

While some high margin business travel may be last to come back online due to teleconferencing and decentralized workspaces, school is out again this year and families are ready to hit the road.

The seven travel stocks I’ve chosen here are in the best shape to really benefit from summer travel’s return:

  • Boyd Gaming (NYSE:BYD)
  • Bally’s (NYSE:BALY)
  • Canterbury Park (NASDAQ:CPHC)
  • Vail Resorts (NYSE:MTN)
  • Penn National Gaming (NASDAQ:PENN)
  • Travel + Leisure (NYSE:TNL)
  • Southwest Airlines (NYSE:LUV)

Travel Stocks to Buy: Boyd Gaming (BYD)

a woman smiling while using a slot machine in a casino. representing gambling stocks

Source: Maridav/Shutterstock, Inc.

While it sports a $7 billion market cap, BYD isn’t likely a name a lot of people recognize as a Vegas brand, or even a national gambling resort brand. But BYD has 28 gaming properties in 10 states, with 11 hotels and casinos in Las Vegas.

That means people don’t have to travel far to visit one of BYD’s properties. With resorts and casinos from Pennsylvania to Louisiana to Missouri, people that have been gambling in the markets for the first time are likely to get back to the tables again.

Like most of the travel stocks here, BYD made a big run last year, but it’s up 52% year to date, so investors are expecting some significant earnings growth as the year unfolds. It may look a bit pricey, but it’s well situated to make growth happen.

Portfolio Grader grade: A

Bally’s (BALY)

BALY stock Entrance to Bally's Hotel on the Las Vegas Strip lit up at night.

Source: Ceri Breeze / Shutterstock.com

While BALY has some of the most iconic properties in Las Vegas, it also has properties across the U.S., with digital sports books in states as well.

In the era of mobility, digital betting was very helpful when casinos and resorts were shuttered. And it helped generate operating capital as properties reopened at limited capacities.

But now everything is getting back to normal and BALY is one of those travel stocks that investors see as a bellwether for the gaming industry. In April it announced it was issuing another $600 million in stock, which has cut into the stock’s performance this year. And an earnings miss announced earlier this month has also kept BYD stock growth to around 16% year to date.

This makes now a good time to get in at a discount.

Portfolio Grader grade: B

Travel Stocks to Buy: Canterbury Park (CPHC)

racing horse coming first to finish line in vintage style

Source: Olga_i via shutterstock

If you had a chance to see the Kentucky Derby or the Preakness this year, you know that in-person horse racing is back. CPHC not only has a track outside the Twin Cities in Minnesota, it also has a casino.

While summer heat in Las Vegas attracts many, there are others who prefer the cooler temps in Minnesota. Of course, CPHC also offers off-track betting and some digital gaming as well.

With a $66 million market cap, this is a small stock, so it’s going to see some volatility since institutional investors stay away from companies this size. But the stock is up 19% year to date and is already posting strong earnings.

Portfolio Grader grade: B

Vail Resorts (MTN)

Skis basking in the sun atop a snow-covered mountain.

Source: Shutterstock

There is more to travel stocks than just gaming resorts however. And MTN is proof of that.

Bear in mind, MTN isn’t just about a mountain in one Colorado ski town. It operates 37 alpine resorts in three countries. And many of those are all across the U.S.

Certainly winter wasn’t kind this year, but over the years ski resorts have become 4-season destinations with plenty to do when the skiing stops. And the resorts are located in great spots, so they’re also valuable destination areas.

Up 23% year to date, there’s plenty of value in this overlooked travel stock.

Portfolio Grader grade: B

Travel Stocks to Buy: Penn National Gaming (PENN)

Penn (PENN) National Gaming logo on the website homepage.

Source: Casimiro PT / Shutterstock.com

If you’ve ever been to a Hollywood Casino, then you’ve been to a PENN place. The company has 43 casinos and racetracks across the U.S. and Canada.

While most of its properties are in cities and towns around U.S., in recent years it has purchased a few properties from BALY, including the famous Tropicana.

PENN also holds a large position in Bar Stool Sports, a popular media organization. It opened a mobile-based betting app that is currently available in Pennsylvania and plans are to expand its base. This is an increasingly important sector for travel stocks like the ones here, since this revenue is reliable and high margin.

The stock is flat year to date, as it is consolidating from last year’s big run. This is a good time to step in.

Portfolio Grader grade: B

Travel + Leisure (TNL)

an empty, sunlit hotel room

Source: Shutterstock

While many people might recognize the name from the cover of its magazine, TNL is actually one of the top travel stocks around. It currently defines itself as a membership and leisure travel company, with a portfolio of nearly 20 resort, travel club, and lifestyle travel brands.

Given its reputation as a travel companion to the smart set, it makes perfect sense to build out its own travel brands and deliver unique experiences for higher end consumers. This is also a very good demographic to possess, since they tend to have more price elasticity, which helps margins.

With $5 billion market cap, it’s not a powerhouse in the travel industry, but its unique position is where its value lies. TNL stock is up 47% year to date after beating Q1 estimates in late April.

It’s doing well now and when international travel opens up, it’s going to shine.

Portfolio Grader grade: B

Travel Stocks to Buy: Southwest Airlines (LUV)

a southwest airline stocks (LUV) jet flying above the clouds

Source: Carlos E. Santa Maria / Shutterstock.com

Airline stocks may be the strongest indicator of how well travel stocks as a whole are doing, since the more people that get on flights, the more people that are traveling.

Granted there are other ways to travel, but the U.S. is a big country and flying gets you where you want to go quickly. If the U.S. had month-long holidays like they do in Europe, long road trips and train rides might steal some market share. But for now, planes win out.

And LUV has built its reputation on being a quality, low-cost people mover that covers the U.S. markets, as well as the Caribbean. It kept down costs by opening routes into secondary airports that had lower gate fees than the majors. Its ticker is for Love Field in Dallas, where it started operations. Love was an alternative to the massive Dallas-Fort Worth Airport where the major airlines dominated the gates.

Over the years it has become a significant player in the industry because it keeps a keen eye on efficiencies without nickel and diming its customers with fees.

The stock is up 37% year to date and should grow into its growth quickly.

Portfolio Grader grade: B

On the date of publication, Louis Navellier has no positions in any stocks in this article. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. 

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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Article printed from InvestorPlace Media, https://investorplace.com/2021/06/7-travel-stocks-to-buy-just-in-time-for-beach-season/.

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