{"id":10861,"date":"2024-02-04T11:54:25","date_gmt":"2024-02-04T16:54:25","guid":{"rendered":"https:\/\/www.bu.edu\/bhr\/?p=10861"},"modified":"2024-05-14T10:39:29","modified_gmt":"2024-05-14T14:39:29","slug":"hospitality-stockwatch-february-2024","status":"publish","type":"post","link":"https:\/\/www.bu.edu\/bhr\/2024\/02\/04\/hospitality-stockwatch-february-2024\/","title":{"rendered":"Hospitality Stockwatch \u2013 February 2024"},"content":{"rendered":"

Authors<\/b>
\n<\/b>Arun Upneja, Ph.D. MBA,<\/b><\/a>\u00a0<\/span>Dean, Boston University School of Hospitality Administration
\n<\/b>Steve Kent, Ph.D., CFA<\/a>,<\/b>\u00a0<\/span>Assistant Professor, Molloy University-School of Business<\/b><\/p>\n

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January results for the market reminded us that \u201cthe trend is your friend,\u201d meaning what worked for the latter half of 2023 is continuing into the first month of 2024.\u00a0The Magnificent Seven, Google parent Alphabet, Apple, Meta Platforms, Microsoft, Amazon, Tesla, and NVidia continued to lead the way in early January.\u00a0But all is not perfect in the way of mega-cap stocks as we have seen some \u201csell on the news\u201d as solid, beats, and in-line earnings, sending these stocks modestly lower as they report Q4 earnings.<\/span>\u00a0<\/span><\/p>\n

Responding to the question of how our stocks are doing to start the year, the short answer is not that great. In January, only 4 of the 18 subsectors we examined outperformed the broader S&P500. Only a few have reported their earnings for the last quarter of the year, so the focus will be on the first full week and second week of February when Hilton, MGM, Marriott, Hyatt, Wyndham, McDonald\u2019s, and others will start to report. Another measure of consumer trends will be later in February and early March when the major retailers start to report their FY (1\/31\/24).<\/span>\u00a0<\/span><\/p>\n

Hospitality investors know how \u201cBlack Swan\u201d or outlier events, as described in Nicolas Taleb\u2019s book, <\/span>The Black Swan,<\/span><\/a> that can impact results and share performance (Taleb, 2010). But increasingly investors are concerned about a \u201cWhite Swan,\u201d a problem that is in plain sight and should not surprise anybody. Taleb and others have recently indicated that the growing US Budget Deficit is a White Swan that will cause problems if we don\u2019t start to increase taxes and reduce spending.\u00a0A high budget deficit, in essence \u201ckicks the can down the road\u201d to another generation who will have to pay down the bills we incurred. Having to pay down debt could slow growth in the future as more capital goes to reduce the deficit rather than focusing on growing.\u00a0<\/span>\u00a0<\/span><\/p>\n

W<\/span><\/b>inners and Losers<\/span><\/b>
\n<\/span>Some of the biggest losers in the past 30 days were Spirit Airline down over 60% (concerns about JetBlue deal), AMC down 34% (share dilution and weak movie premiers), and Hertz down 20% (partial exit from electric vehicles). Winners were Selena up 68% (low stock price\/capital raise) along with online gaming companies Draft Kings, up 16%, and Rush Street 24%.<\/span>\u00a0<\/span><\/p>\n