We recently published a list of 12 Worst Depressed Stocks To Buy Now. In this article, we are going to take a look at where Hyatt Hotels Corporation (NYSE:H) stands against other worst depressed stocks to buy now.
Will the “Fed Put” Come into Play?
With the recent pressure on the equity market from tariffs the market has been wondering if the Fed Put will come into play. On March 20, Mike Wilson, Morgan Stanley CIO, and Chief U.S. equity strategist, joined CNBC to discuss the likelihood of interest rate cuts during the year and the overall market outlook. Morgan Stanley expects the year 2025 to have only a single rate cut, however, if the market slows down more than expected then the Fed Put will come into play with another rate cut. Wilson noted that the Fed is going to respond to lower growth, however, the question that remains unanswered is how will the Fed measure this growth. According to Wilson, the labor market is one of the indicators that the reserve is watching closely. Currently, most of the weakness in the labor market is in the government sector as the government is trying to shrink the sector. Wilson noted that if this move spills over to the private sector then there is no doubt that the Fed will respond to that with another rate cut.
Wilson further elaborated that investors are not concerned about the next 12 months, rather they are more curious to know the current market situation. He noted that Morgan Stanley’s view of the market coming into 2025 was that the first half would be tougher due to the high expectations and the government sequencing its policies. One other reason behind this was that market expectations were too high whereas the reality was somewhat different. Wilson noted that we entered this year when the Fed was cutting rates and the valuations were high, so the current market slowdowns are partly due to the much-needed market correction as well. He also noted that there is a growth deceleration going on with the AI capital expenditure as well, which Wilson believes is good as now the expectations are more aligned with reality. He elaborated that these are the reasons why the firm believes that the 5,500 for the S&P 500 is a good level.
Looking ahead to the second half of the year, Wilson acknowledged potential tailwinds from growth-positive policy changes like tax cuts, deregulation, and lower yields. However, he argued that these are too distant for markets to price in currently. He also emphasized that while a “Trump put” may not exist, the “Fed put” remains active but would likely require worsening conditions in labor markets or credit and funding markets, scenarios that would initially be negative for equities.
Our Methodology
To curate the list of 12 worst depressed stocks to buy now we used the Finviz stock screener, Yahoo Finance, and CNN. Using the screener we aggregated a list of stocks that have fallen more than 15% over the past 12 months and are currently trading within 0% to 3% of their 52-week lows. Next, from this aggregated list we shortlisted stocks with more than 20% analyst upside potential. Lastly, we ranked the stocks in descending order of the number of hedge funds that have stakes in them (from best to worst), as of Q4 2024. Please note that the data was recorded on March 19, 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
The lobby of a busy hotel, with guests checking in and a staff member welcoming them.
Hyatt Hotels Corporation (NYSE:H)
52 Week Range: 119.30 – 168.20
Current Share Price: $122.21
Analyst Upside Potential: 31.74%
1-Year Performance: -22.21%
Number of Hedge Fund Holders: 35
Hyatt Hotels Corporation (NYSE:H) operates as a global hospitality company managing a diverse portfolio of 1,442 hotels and all-inclusive resorts. Its core business involves managing, franchising, and licensing properties across five distinct brand portfolios.
On March 10, Wells Fargo lowered the firm’s price target on the stock to $16 from $17, while keeping an Underweight rating. The firm quoted the recent quarterly results to be discouraging with uncertainty likely to persist. During the fiscal fourth quarter of 2024, Hyatt Hotels Corporation (NYSE:H) announced enhancing its portfolio with notable openings such as Park Hyatt London, River Thames, Grand Hyatt Deer Valley, and Thompson Palm Springs. It also acquired new brands like The Standard and Bahia Principe Hotels, adding to its luxury and lifestyle segments. Moreover, the company also reported system-wide RevPAR (Revenue Per Available Room) growth of 4.6% for 2024, driven by strong demand for its luxury brands. However, despite this, the stock has fallen around 22% over the past 12 months making it one of the worst depressed stocks to buy now.
Baron Focused Growth Fund stated the following regarding Hyatt Hotels Corporation (NYSE:H) in its Q2 2024 investor letter:
“Global hotelier Hyatt Hotels Corporation (NYSE:H) declined 4.7% in the quarter and hurt performance by 29 bps. The disappointing share price performance was due to a deceleration in growth in revenue per available room as a result of modestly slower leisure bookings. However, the company continues to increase its business transient and group bookings, which are now pacing 7% ahead of 2023 levels. These bookings are half of its business today. Robust mid-single-digit growth in units and modest margin expansion should lead to double-digit growth in EBITDA this year. In addition, Hyatt continues to sell assets in its bid to become a more asset-light business. It also has one of the strongest balance sheets in its industry today. All of the above should generate significant free cash flow that Hyatt can use to accelerate share buybacks. Hyatt has repurchased more than 80 million shares since its IPO in 2009! It now has just 100 million shares outstanding. Yet, despite 85% of Hyatt’s cash flow generated by fees, its stock still trades at a discount to peers.”
Overall, H ranks 5th on our list of worst depressed stocks to buy now. While we acknowledge the potential of H as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than H but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
