With warmer days just around the corner, investors may want to look at some of the top stocks for Spring.
For example, college kids all over the U.S. are going on Spring Break. That’s great news for airlines with the Transportation Security Administration already seeing travel volumes 6% higher than year-earlier numbers.
We can even look at hotel stocks, like Hilton Worldwide (NYSE:HLT), which push higher in the warmer months. Cruise lines, like Royal Caribbean (NYSE:RCL), typically do well, too. Warmer months are even great for companies like Airbnb (NASDAQ:ABNB) especially with guest demand still strong, according to a company letter to shareholders.
Even Booking Holdings (NASDAQ:BKNG) is attractive as we head into the warmer months. Granted, it’s a $3,500 stock, but the latest pullback is an opportunity.
Better, according to Forbes.com, 40% of respondents expect to travel even more than they did in 2023, which could fuel even more upside for Spring stocks. That being said, investors may want to start buying these top stocks for Spring.
Carnival (CCL)
With its latest pullback, Carnival (NYSE:CCL) looks interesting as one of the top stocks for Spring.
For one, according to Cruise Lines International Association (CLIA), about 35.7 million people are expected to cruise in 2024, up from 31.5 million in 2023. Two, most cruise lines are now booked solid for the next 12 months. Three, its competitors, such as Royal Caribbean just blew earnings out of the water. In fact, RCL posted earnings per share (EPS) of $1.25, which was far better than expectations for $1.14. It even issued a strong outlook.
All of which makes CCL even more attractive, as it nears earnings on Mar. 25.
In addition, analysts at Stifel just raised their price target on CCL to $26, with a buy rating. The firm noted that “recent “unjustified underperformance” relative to peers has presented an attractive buying opportunity,” as quoted by TheFly.com.
Stifel also believes CCL could raise its full-year guidance when it releases earnings. All thanks to strong demand and pricing.
We also have to consider that its forward price-to-earnings multiple of just 15.3 isn’t reflective of the company’s improvements. CCL is also still trading at less than sales, too.
Delta Air Lines (DAL)
We can also look at airline stocks, like Delta Air Lines (NYSE:DAL).
According to the TSA, spring break travel volume is expected to topple 2023 numbers across the country. As noted by MassLive.com, “In 2024, officers said there could be nearly 400,000 travelers coming through the airport during each week of spring break in March.”
Also, according to Hayley Berg, lead economist for the booking platform Hopper, noted by The New York Times, airfares will continue to rise into late spring, as travel heats back up.
Even better, analysts are bullish on the airline sector, with a majority rating stocks, like DAL a buy. Deutsche Bank, for example, rates Delta a buy, noting, “the more moderate available seat mile, or ASM, growth rate for 2024” will have “more positive implications for domestic unit revenue performance.”
Even Bridgewater Associates, the hedge fund founded by billionaire Ray Dalio just increased its stake in DAL by 529,100 shares. Plus, with Delta, we can collect its current yield of about 1%.
Amplify Travel Tech ETF (AWAY)
Or, if you’d prefer to diversify your Spring travel holdings at a lower cost, there’s always an exchange-traded fund (ETF) like the Amplify Travel Tech ETF (NYSEARCA:AWAY).
With 31 holdings, and an expense ratio of 0.75%, the ETF tracks companies in the “travel technology business” that use the Internet for travel services such as bookings, ride-sharing, price comparisons and travel advice.
Some of its top holdings include Uber Technologies (NYSE:UBER), Lyft (NASDAQ:LYFT), Airbnb, Booking Holdings, and Trip.com (NASDAQ:TCOM). What’s nice about the AWAY ETF is that it’s less than $20 a share. If I wanted to buy 100 shares, it would cost me about $2,000, which allows me to diversify with 31 travel stocks, including the $3,500 Booking Holdings stock.
Even better, according to Forbes.com, “When asked how much they’ll travel in 2024, 52% of consumers said they plan to travel the same amount as they did in 2023. Another 40% of respondents expect to travel even more. Younger generations are the most likely to travel more this year. Gen Z (56%) and Millennials (49%) report more travel on their agenda compared to only 39% of Gen X and 29% of Baby Boomers increasing travel amounts.”
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
