13 Best Vacation Stocks to Buy Now

8) Marriott Vacations Worldwide Corporation (NYSE:VAC)

Number of Hedge Fund Holders: 26

Marriott Vacations Worldwide Corporation (NYSE:VAC) operates hotels. It provides vacation ownership, exchange, rental and resort, and property management.

Marriott Vacations Worldwide Corporation (NYSE:VAC) is expected to see an increase in global share over the upcoming few years, mainly because of the strong intangible asset, which is strengthened by both hotel owners and travelers. The company’s recent 2023 launches of the Spark and StudioRes brands should extend its reach into the midscale and extended-stay segments. Also, these launches can add several hundred hotels each over the upcoming years.

Marriott Vacations Worldwide Corporation (NYSE:VAC) was able to cement its long-term brand advantage with its acquisition of Starwood and partnership with MGM’s Vegas portfolio. Starwood’s luxury portfolio and MGM’s strong presence in gaming continue to complement Marriott Vacations Worldwide Corporation (NYSE:VAC)’s dominant upper-scale position in North America.

The company plans to reduce leverage to 3x by 2025 end and return cash to its shareholders. With the reduction in product costs, the company’s margins should be improved. Recently, Marriott Vacations Worldwide Corporation (NYSE:VAC) announced a 20-year license agreement with Sonder, which should add ~9,000 rooms to the former’s portfolio by the year’s end. As a result, the market estimates that this might help its net unit growth.

In its 2Q 2024 results, Marriott Vacations Worldwide Corporation (NYSE:VAC) highlighted that travel demand remained strong, with resorts running at 90% occupancy. For 2024, the company expects contract sales in the range of $1,790 million – $1,825 million and adjusted EBITDA of between $685 million – $715 million. We saw 26 hedge funds long Marriott Vacations Worldwide Corporation (NYSE:VAC) in the second quarter.

As per Wall Street, the shares of Marriott Vacations Worldwide Corporation (NYSE:VAC) have an average price objective of $122.00. Baron Funds, an investment management firm, released its fourth quarter 2023 investor letter. Here is what the fund said:

“Shares of timeshare company Marriott Vacations Worldwide Corporation (NYSE:VAC) fell in the quarter, driven by soft sales of timeshare units due to higher interest rates and the slow ramp of a new product offering. A default rate that was higher than the company had anticipated forced it to take a charge to increase its reserves, pressuring earnings and cash flow. We opted to exit our position due to the increased stress on its consumer base and a resulting increase in financial leverage, which we found inappropriate for a focused fund.”