The Bad PlaceUS Top News and Analysis | Travel demand shows no signs of slowing. 3 stocks on Josh Brown's list to ride the wave
Travel demand shows no signs of slowing. 3 stocks on Josh Brown's list to ride the wave
This is The Best Stocks in the Market, brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management. Josh — The last time we wrote to you about the travel sector broadly, the big picture idea was that these were among the strongest names in the consumer discretionary part of the market because travel had been immune to some of the concern over household spending. People have been pulling back on lots of wants and needs, but the desire to get on a plane and check into a hotel is showing zero signs that it is abating. With the exception of Expedia (EXPE), the travel names we've written about have held up remarkably well given the market turmoil that began in February. The Expedia sell-off has nothing to do with travel spending, it's a byproduct of the AI disruption worries. As for the rest of the sector, cruising, flying, lodging, etc. are all pretty HALO and, as a result, these stocks have been hanging in there on our list. Sean thought it would be a good time to check in on the travel names we still have on our Best Stocks in the Market list given the underlying strength of the theme in the real economy. People are trading down and sacrificing elsewhere but they're not throwing away the experience portion of their budgets. Good news. We've got a trio of names to show you today — Hilton Worldwide Holdings (HLT), Marriott International (MAR) and Viking Holdings LTD (VIK).
Hilton Worldwide Holdings, Inc. (HLT): Sean — Post-Covid, travel stocks have been massive compounders. HLT has annualized 21% a year in total returns the past five years. But if you zoom out to 10 years (inclusive of a 51% drawdown in April 2020) the hotel chain has annualized an even more impressive 23% a year. We just had one of the largest tech booms in history the past decade. Hilton had a better annualized return than: Meta, the literal creator of today's social media, Amazon, the creator of e-commerce, and Microsoft, a leader in software, cloud and AI. Hilton even has the same annualized return as Google, the AI darling, cloud super-power, and owner of one of the best streaming platforms out there. How wild is that? People love traveling, and these two travel titans are delivering year in and year out. Starting with HLT first, in 2025 the chain had a net unit growth rate of 6.7% year-over-year with nearly 9,000 hotels in operation and 100,000 rooms open throughout the year. Hilton reports later in the month, they expect to report 9% top line revenue growth, 38% EBIT growth and roughly 14% EPS growth, all year over year. Josh — Regular readers of this column know we learn a lot about how persistent the buyers are by how a stock behaves during a broad market sell-off. Hilton (HLT) acts pretty well so far. This is where you separate damage from deterioration. Yes, the stock lost the 50-day, but it hasn't broken the trend. Price pulled back from the highs and is now hovering around that $300 area, which had been resistance and is now being tested as support. RSI in the low 50s shows momentum cooled off, not collapsed. For investors, this is still very much in play. The line that matters is the 200-day near $280 on a weekly closing basis. As long as that holds, this is a pullback within an uptrend, not the end of it. A move back above $300–$305 would quickly repair the chart and put the highs back in focus.