An Explosive Turnaround Stock That Doubles as a Great “Reopening Trade”


What do you miss most about life before Covid-19?

Going to the movies with friends? Taking the kids to Dave & Buster’s? Traveling? Eating out at restaurants? Bar hopping?

If those are near the top of your list of “things you miss the most,” then you’re like most Americans. According to a 2020 Apartment Guide survey, 24% of Americans miss traveling most, while 16% miss hanging out with friends most, and 12% miss going to restaurants and bars most.

The common thread among those things? They’re experiences.

No surprise there. Prior to the pandemic, we were sprinting headfirst into the so-called “Experience Economy,” wherein consumers were placing more value in (and spending more money on) experiences rather than products.

In 2019, experiences accounted for over 65% of consumer discretionary spending. Personal consumption expenditures (PCE) on experience-related services – such as attending spectator events, visiting amusement parks, eating at restaurants, and travel – had grown about 4X as fast as spending on physical goods in the 2010s.

Then, in 2020, Covid-19 took all those experiences away from us. In the absence of our favorite experiences, our hearts grew fonder of those experiences. We fostered a deep hunger and desire to do those things once the world reopened.

That time has come. The world is reopening.

Now, it’s time for us to take those experiences back.

Throughout 2021 and 2022, consumer spending on experience-related services will soar like nothing we’ve ever seen before.

Folks are going to go to the movies. Eat out at restaurants. Take vacations. Go to bars.

These things will happen with great frequency over the next few quarters – meaning that some of the best stocks to buy today are those which are levered to this experience spending surge.

Today, we will tell you about one such stock. It’s a stock that is simultaneously a great reopening play and in the midst of an enormous turnaround with a ton of long-term potential. This winning combination is why we believe this tiny stock may be one of the best stocks to buy for 2021.

A Hypergrowth Entertainment Company with a Lot of Upside over the Next 12 Months

One of things I miss most from the “before-Covid” era is socializing. Going out to a bar, restaurant, club, or concert, and just hanging out with friends – I used to love doing that stuff, but haven’t been able to do so fully since early 2020.

My gut tells me a lot of folks feel the same way.

And that’s why I think a small-cap stock by the name of Drive Shack (NYSE:DS) could be one of the best performers in 2021.

Drive Shack is a $300 million golfing company. Doesn’t sound too exciting, I know. But this “boring” company is in the midst of a very exciting turnaround.

Specifically, Drive Shack used to operate a bunch of a traditional golf courses across the country. But the company has been selling those golf courses, and using the proceeds to flesh out a new multi-purpose entertainment concept centered around golfing which I think could be a huge long-term hit.

The concept is very much like Dave & Buster’s… but for adults and centered around golf.

Imagine a huge, 60,000-square-foot property where you can hit golf balls (like at a driving range), but which is surrounded by interactive gaming systems, food, a bar, multiple TVs, and live music. It’s basically a driving range meets restaurant, meets club, meets bar.

It’s an alternative social entertainment venue for adults.

Sound like the exact type of place that will see enormous demand over the next 12 months as the world gets back to “normal”?

It is.

The company currently operates just four of these Drive Shack locations in the Southeast, but intends to open dozens and dozens more all across the country over the next few years. At the same time, Drive Shack is pioneering an even newer alternative social entertainment concept called the Puttery, which is adult mini-golf with a bar, food, and social hangout spaces. The first Puttery will open in Texas in summer 2021.

Between Drive Shack and Puttery expansions, this company is in a great position to grow at lightspeed over the next few years… even without the pent-up demand tailwind, which will only add fuel to the fire in 2021 and cause Drive Shack to have a really, really good year.

The best part is that Drive Shack is just a $300 million company – yet analysts see sales rising to $400 million by 2022, on nearly 40% revenue growth that year.

In other words, this is a company that could easily be clearing $500 million in sales by 2023. On a market cap of about $300 million today, then, Drive Shack stock has enormous multi-year upside potential.

I suspect a lot of that upside potential will be realized over the next 12 months amid this great economic reopening.

And that’s why I think DriveShack stock should be on your buy radar today.

On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article. 

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