Hedge Fund Manager Niles Bullish on Travel and Leisure Equities

Tbelow has been a brisk speed of purchaser air vacation, hotel stays, on line casino visits, and the like, but journey and leisure shares are not reflecting as a lot.

That is an indicator that there is a disconnect at participate in, and that could lead to prospect with trade traded funds these as the ALPS World-wide Travel Beneficiaries ETF (NYSEARCA: JRNY). Supporting the case for JRNY is the stage that some industry observers are constructive on journey and leisure shares.

That involves hedge fund supervisor Dan Niles, who told CNBC that he’s purchasing journey equities in anticipation of a lot more upside fueled by robust demand from customers amid the looming summer months journey time.

“Yesterday we bought a lot more in the reopening group … because we sense like there is a great deal additional to arrive,” Niles claimed in the CNBC interview.

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

Talking of Penn National, the premier regional casino, that stock is terribly bruised, but Niles isn’t the only a person who sees chance in that JNRY component.

“PENN’s the latest underperformance coupled with greater sports betting overall performance provides an possibility,” explained Morgan Stanley analyst Thomas Allen in a Monday observe. “While PENN’s underperformance was relatively warranted specified much more blended the latest earnings effects and declining athletics betting market place share in critical states like Michigan, Pennsylvania and Illinois, we have witnessed sports activities betting share stabilize in the US.”

Allen lifted his score on the on line casino stock to “overweight” from “market weight.” His $51 price tag target on the shares indicates upside of about 40%.

Broadly talking, journey and leisure shares are customer discretionary names, and those that are not are continue to reliant on client behavior. As Niles pointed out to CNBC, modifications in client purchases could bolster the situation for travel names.

“You’re seeing this significant switch from men and women obtaining things like PCs and smartphones … to now they’re likely and taking flights and heading to motels, and so forth. That is in which the large switch is we’re looking at ideal now,” the hedge fund supervisor informed CNBC.

Other journey and leisure ETFs involve the VanEck Vectors Gaming ETF (BJK) and the U.S. Worldwide Jets ETF (JETS).

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