Hedge Fund Manager Niles Bullish on Travel and Leisure Equities

Tright here has been a brisk tempo of consumer air vacation, resort stays, casino visits, and the like, but vacation and leisure shares are not reflecting as significantly.

That’s an indicator that there’s a disconnect at engage in, and that could lead to chance with exchange traded resources these types of as the ALPS World Vacation Beneficiaries ETF (NYSEARCA: JRNY). Supporting the circumstance for JRNY is the point that some market observers are constructive on travel and leisure stocks.

That contains hedge fund supervisor Dan Niles, who informed CNBC that he’s shopping for travel equities in anticipation of more upside fueled by robust demand from customers amid the looming summer time vacation period.

“Yesterday we acquired extra in the reopening classification … due to the fact we really feel like there is a large amount a lot more to appear,” Niles explained in the CNBC interview.

Niles’ company 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 Nationwide Gaming (NASDAQ:PENN) and Uber (NYSE:UBER). Airbnb, Booking, Lyft, Penn Nationwide, and Uber are all JRNY holdings.

Speaking of Penn National, the biggest regional casino, that inventory is poorly bruised, but Niles is not the only a single who sees chance in that JNRY element.

“PENN’s recent underperformance coupled with better sports activities betting performance offers an prospect,” reported Morgan Stanley analyst Thomas Allen in a Monday be aware. “While PENN’s underperformance was fairly warranted specified far more blended modern earnings results and declining sports activities betting sector share in vital states like Michigan, Pennsylvania and Illinois, we have witnessed sports activities betting share stabilize in the US.”

Allen lifted his ranking on the on line casino stock to “overweight” from “market excess weight.” His $51 value goal on the shares indicates upside of about 40%.

Broadly talking, travel and leisure stocks are client discretionary names, and all those that are not are still reliant on customer habits. As Niles pointed out to CNBC, modifications in customer purchases could bolster the case for journey names.

“You’re looking at this huge change from people today obtaining things like PCs and smartphones … to now they are going and getting flights and going to accommodations, and many others. Which is where by the massive swap is we’re observing right now,” the hedge fund manager advised CNBC.

Other journey and leisure ETFs consist of the VanEck Vectors Gaming ETF (BJK) and the U.S. International Jets ETF (JETS).

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