MAR: Adding Marriott to Investing Ideas (Short Side)

06/06/19 11:35AM EDT

Below is a brief note written by CEO Keith McCullough:

Since I have 25-30 high quality short ideas coming out of my Independent Research team (we have SELL ideas, the Old Wall doesn’t), I'm just getting started here in adding back shorts on Day 3 of the Counter @Hedgeye TREND bounce in US Equity Beta.

Marriott (MAR) is a new name for Todd Jordan, Sean Jenkins, and Felix Wang (our Gaming, Lodging & Leisure Research team) on the short side (it should be a new name because you don't short hotel stocks and/or pro-cyclical REVPAR expectations until The Cycle starts to slow!).

Here are 3 bullet points on why:

  • RevPAR underperformance a trend, particularly in Limited Service
  • 2019 could prove to be a one-off in terms of net unit growth acceleration – a look under the pipeline hood highlights plenty of risk
  • 3yr EBITDA CAGR could disappoint and not enough to justify valuation in our opinion

Sell the bounce,

KM
© 2024 Hedgeye Risk Management, LLC. The information contained herein is the property of Hedgeye, which reserves all rights thereto. Redistribution of any part of this information is prohibited without the express written consent of Hedgeye. Hedgeye is not responsible for any errors in or omissions to this information, or for any consequences that may result from the use of this information.