United Rentals (URI), Sabre Corporation (SABR), Criteo (CRTO) and Royal Caribbean (RCL)
United Rentals (URI) operates in a cyclical industry with a volatile stock price but with a CAGR of 23% for earnings over the the past 5 years investors have been well rewarded. Looking ahead the outlook remains bright. The Purchasing Managers Index at 59% remains very optimistic about future growth. Thats up from 55% a year ago with any result above 50% being a bullish forward indicator. Long term trends for the industry are positive as companies realize the significant benefits from renting over ownership. Additionally, as market leader URI enjoys significant economies of scale but with a market share of just 11% it still has a long runway for growth. Trading on a multiple of 11 times consensus 2018 earnings it looks cheap.
Sabre Corporation (SABR) is a travel technology company, the biggest service provider for air bookings in North America and connects the worlds leading hotels, car rental brands, rail carriers, cruise lines and tour operator with travel buyers. That's a fast growing business with significant barriers to entry in the airlines solutions while hospitality is competitive. The stock has fallen 33% over the past 2 years and trades on a TTM PE of 12. However, Imperial Capital initiated coverage this week with a target price of $30 representing a 50% increase over Fridays close. With consensus 2020 earnings of $1.91 that looks quite reasonable.
With the stock down 50% and a forward 2018 PE of 12 Criteo (CRTO) looks cheap again. The company is a leading advertising company in the digital market space that hit problems last year when Apple blocked it from Safari browser users. However the company has got over it with Q4 number report sales up 23% and earnings up 30%. With the stock down 50% and a forward 2018 PE of 12 it looks cheap again.
Finally Cruise Lines such as Royal Caribbean have had a great run with the stock rising more than threefold and EPS growing by 55% CAGR over the past 5 years. Numerous tailwinds continue to boost the outlook with an aging population, strong growth in China and tax benefits in the US likely to provide a boost. Earnings growth is likely to moderate going forward with consensus forecasts suggesting 15% annual growth. With a 2018 forward PE of 13.6 the stock looks cheap at $119.00. Stifel Nicolaus recently issued at $152.00 target price citing an expected positive revision to summer and full year guidance. With reporting expected in the next couple of weeks investors may want to take a look.
This post is not a recommendation to buy or sell any security or derivative. Stocks are not suitable for all investors. Please do your own research.
Submitted April 22, 2018 at 07:17AM by InterestingNews1 https://ift.tt/2HQVK1r
