Travel, Leisure Stocks Could Be Consumer Cyclical Value Ideas

As the Omicron strain of the coronavirus pandemic spreads at a seemingly unrelenting pace, some investors are growing apprehensive regarding travel and leisure equities.

jrny 1yr

Those concerns could eventually give way to opportunities with assets such as the ALPS Global Travel Beneficiaries ETF (NYSEARCA: JRNY). The consumer cyclical sector, which is home to many JRNY components, is coming off a strong fourth quarter, prompting some concern that the sector is overvalued.

The group is “trading at a median 3% premium to our fair value estimates. Despite this, valuations in the space have become more attractive, with 30% of stocks in the sector trading in 4- or 5-star territory (a marked improvement from 16% three months ago),” says Morningstar analyst Erin Lash. “In this context, we think travel and leisure is ripe for investment, as we don’t expect rising case counts will permanently depress consumers’ desire to travel.”

JRNY, which

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Travel & Leisure stocks edge lower following new UK restrictions By

© Reuters.

By Samuel Indyk – The sub-index edged lower on Thursday following the announcement of new COVID restrictions by the UK government after market on Wednesday.

UK Prime Minister Boris Johnson delivered a press conference where he outlined new measures to attempt to slow the spread of COVID-19 and particularly the new Omicron variant.

The key measures announced by Johnson include guidance to work from home, a new mask mandate in most indoor public venues (including cinemas), and the need for the NHS COVID pass for places where large crowds gather. The COVID pass will be required at unseated indoor venues with more than 500 people, unseated outdoor venues with more than 4,000 people and any venue with more than 10,000 people.

Two doses of any approved vaccine or a negative lateral flow test would be sufficient for entry under the new rules.

“The page has been turned

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Travel & leisure stocks come under pressure as UK restores some restrictions By

© Reuters

By Samuel Indyk – The sector was under selling pressure on Friday after a new COVID variant was discovered in Southern Africa which has been described as the “most significant” seen yet.

The UK Transport Secretary Grant Shapps announced new travel restrictions from six countries in Southern Africa as a precautionary measure. From 12pm today, South Africa, Botswana, Zimbabwe, Lesotho, Eswatini, and Namibia have been added to the UK’s Red list, where people arriving in the UK must take quarantine measures.

The UK has also placed a temporary flight ban on arrivals from those countries for the weekend.

The European Commission President Ursula von der Leyen is proposing, in close coordination with member states, to activate the emergency brake and stop are travel from the southern African region.

B.1.1.529 Variant

The new variant, named B.1.1.529, has been described by scientists as the “the most significant variant they’ve

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Travel & Leisure stocks on high alert as Delta mutation poses threat to recovery By

© Reuters

By Samuel Indyk – stocks in the UK will be on high alert over the coming days and weeks as a new mutation of the Delta variant threatens to put a dent in the recovery of the industry that has been hurt more than most by the pandemic.

AY.4.2, which some are referring to as ‘Delta Plus’, contain mutations that could give the virus survival advantage, according to the BBC. The UK is currently undertaking tests to understand how large a threat the new mutation could pose.

AY.4.2 has not yet been considered a variant of concern, or a variant under consideration – categories that are assigned to different variants and the level of risk associated with them.

If a variant is considered to be more contagious then it would be classified as a variant under investigation. If it was evidently more transmissible, or could potentially

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