5 Cheap Travel Stocks to Buy Now

In this article, we discuss 5 cheap travel stocks to buy now. If you want to see more stocks in this selection, check out 12 Cheap Travel Stocks to Buy Now.

5. Makemytrip Ltd (NASDAQ:MMYT)

Upside Potential: 32.70%
Price target: $39
Number of Hedge Fund Holders:12

MakeMyTrip Ltd (NASDAQ:MMYT) is one of the companies that has seen its fortune improve with growth in the tourism industry. As a provider of travel products and solutions in India, the U.S., Singapore Thailand, among other top travel destinations, it continues to elicit booming business. After reporting an operating loss of $18 million in 2021, the company bounced back to an operating profit of $70.3 million in fiscal 2023. The bounce back to profitability comes from benefiting from government policies aimed at boosting travel and tourism.

Consequently, analysts remain bullish about the stock, with an average price target of $39, implying a 32.70% upside potential from current levels.

In the first quarter of 2023, 12 hedge funds had stakes worth $85.86 million in Makemytrip Ltd (NASDAQ:MMYT). In addition, Marshall Wace LLP held 1.26 million shares of Makemytrip Ltd (NASDAQ:MMYT) shares, valued at $30.91 million, making it the company’s most significant stakeholder.

4. The Walt Disney Company (NYSE:DIS)

Upside Potential: 38.44%
Price target: $120.53
Number of Hedge Fund Holders: 95
The Walt Disney Company (NYSE:DIS) is a global media and entertainment conglomerate that is famous for its iconic brands, creative minds and innovative technologies. The Walt Disney Company (NYSE:DIS) had a mixed performance in 2023, as it faced both challenges and opportunities in its various businesses. The company reported revenue growth of 10% and 13% for the first and second quarters of 2023, respectively, compared to the same periods in 2022.

The Walt Disney Company (NYSE:DIS) has a consensus rating of Moderate Buy, derived from 12 buy ratings and 5 hold ratings. The average price target for the company is $120.53, with the highest analyst price target at $147 and the lowest forecast at $88. On average, the price target indicates a 38.44% increase from the current price of $87.06.

Based on Insider Monkey’s data, The Walt Disney Company (NYSE:DIS) saw a decrease in sentiment from hedge funds, with 95 funds holding a positive outlook on the company at the end of the first quarter of 2023, compared to 99 funds in the previous quarter. Notably, Trian Partners, led by Nelson Peltz, is a significant investor in the company, holding 5.92 million shares.

Here is what VGI Partners Global Investments Limited specifically said about The Walt Disney Company (NYSE:DIS) in its 2022 annual investor letter:

“The Walt Disney Company (NYSE:DIS) is a diversified media conglomerate operating media networks, theme parks, film and TV studios and direct-to-consumer streaming services. It is the global leader in theme parks with hotels and cruise lines aimed at families. Key assets within Disney are the instantly recognisable entertainment franchises that have multiple avenues of monetisation such as Mickey Mouse, Star Wars, ABC and Marvel’s Avengers.

Disney’s share price declined due to a number of factors in 2022, presenting us the chance to purchase a long-admired business and its unique collection of valuable intellectual property assets at what we consider to be a very attractive valuation. Summarily, the EPS of Disney has declined from US$7 in 2018 to ~US$2.60 in 2022 but we believe that the earnings power of the assets has not diminished to anywhere near this extent.…” (Click here to read the full text)

3. H World Group Limited (NASDAQ:HTHT)

Upside Potential: 45.63%
Price target: $60.35
Number of Hedge Fund Holders: 33

H World Group Ltd (NASDAQ:HTHT) is another cheap travel stock worth closely watching as it develops leased and owned and franchised hotels in China. It is one of the companies well poised to benefit from opening Chinese borders with the asking of travel restrictions due to COVID-19.

While this stock is down by about 3% year to date, it appears to be trading at a discount as analysts have an average price target of $60.35, implying it could rally by 45.63% from current levels.

As of the end of the first quarter of 2023, Insider Monkey’s database indicates that 33 hedge funds, tracked by the platform, held stakes in H World Group Limited (NASDAQ:HTHT). The combined value of these hedge funds’ stakes amounted to $864.72 million.

2. Frontier Group Holdings Inc (NASDAQ:ULCC)

Upside Potential: 49.35%
Price target: $14.83
Number of Hedge Fund Holders:20

Frontier Group Holdings Inc. (NASDAQ:ULCC) is one of the airlines that has benefited from more Americans hitting the skies to travel from one destination to another. The low-fare airline company provides air transportation for passengers in the U.S. and in the Americas. The airline delivered a loss of $0.06 a share in Q1, better than analysts’ expected loss of $0.08 a share. In addition, revenue was up 40% year over year to $848 million.

While the stock has barely moved for the year, analysts are optimistic about its long-term prospects, with an average price target of $14.83, implying 49.35% upside potential.

Insider Monkey’s database shows that 20 hedge funds tracked by Insider Monkey had stakes in Frontier Group Holdings Inc (NASDAQ:ULCC) as of the end of the first quarter of 2023. The total worth of these hedge funds’ stakes was $144.94 million. The biggest stakeholder of Frontier Group Holdings Inc (NASDAQ:ULCC) was Ancient Art (Teton Capital) which had a $42.89 million stake in the company.

1. Playa Hotels & Resorts NV (NASDAQ:PLYA)

Upside Potential: 50.53%
Price target: $12.75
Number of Hedge Fund Holders: 24
Playa Hotels & Resorts NV (NASDAQ:PLYA), a leader in luxury all-inclusive oceanfront resorts in the Caribbean, has been on an impressive run rallying by nearly 30% year to date. The company has benefited from an uptick in tourism traffic and booking prices following the lifting of COVID restrictions and restoration of tourist traffic. Its operating marine has already reached its record high of 28.1%.

Playa Hotels & Resorts NV (NASDAQ:PLYA) currently holds a consensus rating of Moderate Buy. This rating is derived from 3 buy ratings, 0 hold ratings, and 1 sell rating provided by analysts. Playa Hotels & Resorts NV has an average price target of $12.75, with the highest analyst price target being $16 and the lowest forecast set at $8. The improving business environment in the tourism sector is one reason analysts have an average price target of $12.75, implying a 50.53% upside potential to current levels.

According to Insider Monkey’s first-quarter 2023 hedge fund survey, out of the 943 hedge funds analyzed, 24 of them had chosen to invest in Playa Hotels & Resorts NV (NASDAQ:PLYA). Notably, among these investors, Davidson Kempner, led by Thomas Lenox Kempner, emerged as the largest shareholder, holding a significant stake valued at $145.22 million.

In its investor letter for the second quarter of 2023, Silver Beech Capital provided a comment or statement concerning Playa Hotels & Resorts N.V. (NASDAQ:PLYA):

“Playa Hotels & Resorts N.V. (NASDAQ:PLYA) is a small-capitalization owner/operator of 25 all-inclusive resorts in Mexico (Cancun and Pacific Coast), the Dominican Republic, and Jamaica. Playa’s portfolio is branded (mostly Hilton and Hyatt), includes primarily luxury/upscale resorts, and operates at among the highest margins in the hotel industry. Playa’s resorts are irreplaceable assets in supply-constrained markets that continue to benefit from rising post-COVID international tourism.

We believe the public market discounts Playa’s shares based on recessionary fears, however, strong international flight data into Playa’s regional airport hubs do not support this view, and spot private market valuations for Playa’s hotels exceed its public market valuation. Management has demonstrated impressive capital allocation to address this valuation gap by moderating growth capital expenses for only the highest return projects and looking to sell select strategic resorts and repurchase shares at today’s attractive level. Over the last two quarters, Playa has repurchased more than 4% of the company’s outstanding shares. The company trades at a TEV/EBITDA of 7.6x (2023E), and a low double-digit free cash flow yield. We believe Playa’s intrinsic value is more than 50% greater than its June 30 share price.”

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