Are These The Best Leisure Stocks To Buy This Week?
Given the state of the stock market today, investors may want to consider looking at some of the top leisure stocks now. Why? Well, for starters, there appears to be a shift from reopening stocks back towards pandemic growth names. This would likely be due to conflicting views on the current state of the economy. On one hand, key inflation indicators continue to hit record highs. Earlier today, the May core personal consumption expenditures price index rose by 3.4% year-over-year, its largest surge since 1992. While this would alarm some, the Federal Reserve, on the other hand, believes that there is no cause for concern now. Regardless of how things may turn out, leisure stocks are viable plays on both sides of the current trade.
For starters, leisure stocks that flourished throughout the pandemic would be in focus now. Understandably, these are your video streaming and digital entertainment stocks such as Fubo (NYSE: FUBO) and DraftKings (NASDAQ: DKNG). After shedding some of their pandemic gains earlier this year, investors may be seeing more undervalued stocks in the sector. Alternatively, there are also options for investors who see the long-term potential within more in-person leisure stocks as well. As the reopening trade begins to cool off now, travel companies like Royal Caribbean (NYSE: RCL) and Airbnb (NASDAQ: ABNB) could be trading at more reasonable prices.
With all these possible entry points into the leisure trade now, I can understand if investors are keen to hop on. On that note, take a look at these three top leisure stocks making moves in the stock market now.
Top Leisure Stocks To Buy [Or Sell] Today
Netflix is a leisure company that focuses on premium content and production. The company is at the forefront of the streaming industry and is leading the change in replacing linear TV. By offering on-demand content through apps that run on phones, computers, and smart TVs, it enables users to binge-watch and catch up on their favorite programs instantly. Existing linear TV does not offer that and is at a competitive disadvantage. Given how most parts of the world were in lockdown in the last year, Netflix has exploded into popularity.
In late April, the company reported that its revenue grew by 24% year-over-year at $7.16 billion and was in line with its forecast. Operating income was a cool $1.96 billion, an increase of 27.4% compared to a year earlier. The company also ended the quarter with 208 million paid memberships, representing a 13.6% increase year-over-year. It continues to anticipate a strong second half with the return of new seasons of some of its biggest hits and with an exciting film lineup.
Today, Credit Suisse also upgraded Netflix from a Neutral rating to an Outperform rating and maintained a price target of $586. The bank said it expects subscriber growth to normalize and that its recent consumer survey reinforced Netflix’s strong competitive position. The firm also sees a strong August to December pipeline on releases with “numerous potential top-of-funnel titles” according to analyst Douglas Mitchelson. He also expects a stronger full-year slate in 2022 vs 2021. All things considered, do you think NFLX stock is worth buying?
Penn National Gaming Inc.
Penn is an operator of casinos and racetracks. In essence, it owns and operates over 40 gaming and racing properties in 19 states. It also offers live sports betting at its properties in Colorado, Illinois, Indiana, Iowa, and Michigan among others. The company’s properties feature over 50,000 gaming machines, 1,300 table games, and 8,800 hotel rooms. PENN stock has more than doubled in valuation in the last year.
The company had an exciting month in May as it announced that it had received final approval from the Maryland Lottery and Gaming Control Commission to acquire the operations of Hollywood Casino Perryville. Penn also announced the launch of its Barstool Sportsbook mobile app on iOS and Android as well as for desktop users.
On May 6, 2021, the company reported strong first-quarter financials. Firstly, it posted a revenue of $1.27 billion. Despite the pandemic-related restrictions and closures in January, visitation and length of play continue to improve across all age segments of its user database. The company says it has also enjoyed volumes in the month of March that have not been seen since 2019. For its physical properties, Penn also says that it continues to see spend-per-visits that are much higher than it was pre-pandemic. Given all of these favorable trends for Penn, will you consider buying PENN stock?
Carnival is the world’s largest leisure travel company. It provides travelers around the globe with extraordinary vacations at an exceptional value. The company’s portfolio of brands includes AIDA Cruises and Princess Cruises. Carnival also boasts a fleet of over 80 ships that are capable of investing over 700 ports around the world. CCL stock has been up by over 70% in the last year.
Notably, things appear to be heating up on the operational front for Carnival now. Yesterday, the company revealed that its advanced booking volumes are up by 45% quarter-over-quarter. On top of that, Carnival’s cumulative advanced bookings for the year 2022 have already outpaced its 2019 bookings so far. Adding to that, CEO Arnold Donald also provided an optimistic update on the company’s balance sheet. He said, “We have liquidity well into next year and, more importantly, well into the ability to get our full fleet up and going and then we’ll have cash generation.”
Overall, Carnival continues to prepare and bolster its operations in anticipation of tourists returning to cruises. To date, Carnival has either resumed or announced plans to resume voyages for 42 of its ships by the end of November 2021. Given the company’s leading position in the industry, CCL stock could be a viable play for investors looking to bet on the return of cruises now. With all that said, will you be adding it to your portfolio?