Marriott International (MAR)
On a recent vacation in Hawaii, we decided to stay at the J.W Marriott Resort and Spa. While the hotel was on the expensive side, we were quite impressed with the hotel and services. The staffs were friendly; the rooms large and clean, the services were excellent. When I got back, I started to look at MAR and possibly adding this stock to my portfolio.
Looking at the technical side, MAR is trading above its industry average when compared to Hilton (HLT), Starwood Hotels (HOT). Couple of important points:
- MAR trades with a P/E of 31.78, whereas its peers are trading with P/E 29.24.
- The stock started an upward move in August, from $35 to $45 in a matter of three months.
- Marriott's (MAR) is up 40% this year.
- A few analysts have downgraded the stock in recent weeks from buy to hold fearing a pull back as the sector has seen significant gain.
The question is not whether this is good company, it is an excellent company. Marriott is among the best of breed in the travel and lodging industry. However, given the recent movement of MAR and the fact the company is trading higher than its peers, I have decided to hold off buying MAR for the time being. While this is one stock I would love to own and it is my watch list, at $45/share, it is no bargain.
The future outlook for the hotel industry looks bright. The economy is doing well and the employment picture appears to be in great shape. Business and leisure travel should be steady and if not increase in 2007. Barring any major economic events, the long term view is positive for this sector. I would love to buy MAR at $35/share!
