Hedge Fund Manager Niles Bullish on Travel and Leisure Equities

Tlisted here has been a brisk tempo of buyer air vacation, hotel stays, casino visits, and the like, but travel and leisure stocks aren’t reflecting as substantially.

Which is an sign that there’s a disconnect at play, and that could guide to chance with exchange traded resources such as the ALPS Worldwide Journey Beneficiaries ETF (NYSEARCA: JRNY). Supporting the situation for JRNY is the point that some marketplace observers are constructive on journey and leisure shares.

That involves hedge fund supervisor Dan Niles, who advised CNBC that he’s shopping for vacation equities in anticipation of extra upside fueled by robust demand from customers amid the looming summer season vacation season.

“Yesterday we acquired extra in the reopening category … due to the fact we come to feel like there is a ton additional to arrive,” Niles said in the CNBC job 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 National Gaming (NASDAQ:PENN) and Uber (NYSE:UBER). Airbnb, Reserving, Lyft, Penn National, and Uber are all JRNY holdings.

Speaking of Penn Nationwide, the greatest regional on line casino, that inventory is badly bruised, but Niles is not the only one particular who sees opportunity in that JNRY ingredient.

“PENN’s modern underperformance coupled with greater sporting activities betting efficiency provides an option,” reported Morgan Stanley analyst Thomas Allen in a Monday notice. “While PENN’s underperformance was relatively warranted specified extra blended current earnings results and declining sports betting current market share in vital states like Michigan, Pennsylvania and Illinois, we have found sports activities betting share stabilize in the US.”

Allen lifted his rating on the on line casino inventory to “overweight” from “market body weight.” His $51 value target on the shares indicates upside of about 40%.

Broadly speaking, vacation and leisure shares are shopper discretionary names, and those people that are not are even now reliant on customer habits. As Niles pointed out to CNBC, adjustments in purchaser purchases could bolster the case for travel names.

“You’re observing this significant switch from men and women shopping for factors like PCs and smartphones … to now they’re likely and getting flights and going to inns, and many others. Which is where the large switch is we’re seeing appropriate now,” the hedge fund supervisor explained to CNBC.

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

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