Hilton Grand Vacations is the IBD Stock Of The Day, as folks firm up summer travel plans. HGV stock is closing in on multiple buy points.
Yet another Covid variant is emerging, but there are high hopes for the coming summer travel season. Hotel chains, entertainment venues and airlines are betting on the efficacy of Covid vaccines and treatments to make people confident about traveling. The Russia-Ukraine war, and the impact on fuel costs, remains a headwind.
Travel-related companies like global timeshare operator Hilton Grand Vacations are in the midst of the long road back from pandemic losses.
Hilton Grand Vacations, which has 154 properties and more than 710,000 owners, reported a 5% year-over-year decline in EPS to 62 cents in Q4. But sales surged 295% to $838 million.
As of Dec. 31, 2021, the company's resorts and nearly all of the its sales centers that were previously closed due to the COVID-19 pandemic were fully open and operating.
However, some were operating in markets that still have capacity constraints, social distancing requirements and other safety measures that are impacting consumer demand for resorts in those markets, management said in its fourth-quarter earnings report.
Meanwhile, Orlando, Fla.-based HGV completed its acquisition of Dakota Holdings, parent of Diamond Resorts International, on Aug. 2, 2021. HGV bought Diamond in a stock-based transaction with an equity value of approximately $1.4 billion.
"Not only did we close the transformational acquisition of Diamond Resorts, but we exceeded expectations while overcoming numerous pandemic-related challenges," said CEO Mark Wang in a statement.
Wang added that remodeling is well underway at HGV properties ahead of the upcoming launch of its new membership program. Management hopes to unveil the new membership plan in early Q2.
Diamond added 92 leisure resorts and nearly 400,000 owners to HGV's portfolio.
HGV Stock
HGV shares dipped 0.8% to 53.05 on the stock market today. However, HGV stock has raced up nearly 20% since bottoming below its 50-day and 200-day lines on March 7.
HGV stock is in a consolidation with an official buy point of 56.43, according to MarketSmith. But getting above Tuesday's high of 54.55 could offer an early entry. That would also break a trendline from the early November high. Tuesday's high also is very close to other short-term highs in January and February.
Its relative strength line is near highs, though it hasn't made much progress in the past 10 months. Hilton's RS Rating is 89 out of a best-possible 99. Its EPS Rating is just 45.
With a Composite Rating of 87, Hilton Grand Vacations is ranked No. 4 in IBD's Leisure-Services group.
Ranked ahead of HGV are other travel names hoping to rebound as travelers are eager to return to summer travel.
Marriott International fell 1%, but remains in range from a handle-like entry in a short, V-shaped consolidation. Hilton Worldwide dipped 0.8% after also clearing a similar aggressive entry on Tuesday. Delta Air Lines edged down 0.2%. DAL stock recently reclaimed its 50-day line but is hitting resistance at its 200-day.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
