Hedge Fund Manager Niles Bullish on Travel and Leisure Equities

There has been a brisk speed of client air vacation, resort stays, casino visits, and the like, but vacation and leisure shares aren’t reflecting as much.

That’s an indication that there’s a disconnect at perform, and that could guide to possibility with exchange traded cash this sort of as the ALPS Global Vacation Beneficiaries ETF (NYSEARCA: JRNY). Supporting the circumstance for JRNY is the position that some marketplace observers are constructive on travel and leisure stocks.

That consists of hedge fund manager Dan Niles, who explained to CNBC that he’s obtaining journey equities in anticipation of more upside fueled by potent demand amid the looming summertime journey season.

“Yesterday we bought additional in the reopening category … simply because we experience like there is a lot more to arrive,” Niles stated in the CNBC interview.

Niles’ agency owns shares of Airbnb (NASDAQ:ABNB), Scheduling Holdings (NASDAQ:BKNG), Lyft (NASDAQ:LYFT), and cruise operators Carnival (NYSE:CCL) and Norwegian. He also has extended positions in Penn National Gaming (NASDAQ:PENN) and Uber (NYSE:UBER). Airbnb, Reserving, Lyft, Penn National, and Uber are all JRNY holdings.

Talking of Penn National, the premier regional casino, that inventory is poorly bruised, but Niles isn’t the only one particular who sees opportunity in that JNRY part.

“PENN’s latest underperformance coupled with improved sporting activities betting overall performance presents an prospect,” explained Morgan Stanley analyst Thomas Allen in a Monday note. “While PENN’s underperformance was to some degree warranted offered extra mixed recent earnings results and declining sports betting market place share in crucial states like Michigan, Pennsylvania and Illinois, we have noticed athletics betting share stabilize in the US.”

Allen lifted his score on the on line casino inventory to “overweight” from “market pounds.” His $51 value target on the shares implies upside of about 40%.

Broadly speaking, travel and leisure stocks are shopper discretionary names, and individuals that are not are however reliant on customer behavior. As Niles pointed out to CNBC, variations in consumer buys could bolster the scenario for travel names.

“You’re seeing this huge change from people getting factors like PCs and smartphones … to now they’re likely and having flights and heading to inns, etc. That’s wherever the large swap is we’re viewing appropriate now,” the hedge fund manager advised CNBC.

Other vacation and leisure ETFs incorporate the VanEck Vectors Gaming ETF (BJK) and the U.S. World-wide Jets ETF (JETS).

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