We recently published a list of the 12 Best Leisure Stocks to Buy Right Now. In this article, we are going to take a look at where United Parks & Resorts Inc. (NYSE:PRKS) stands against the other best leisure stocks to buy right now.
Overview of the Global Leisure Industry
According to Allied Market Research, the global leisure travel market had a market size of $1.2 trillion in 2023. It is anticipated to grow at a compound annual growth rate of 18.3% between 2024 and 2033, reaching $6.2 trillion by the end of the forecast period. The rise of social media is one of the key reasons behind the continued growth in leisure travel, as people are gaining increasing awareness and exposure to various industry trends.
The outdoor leisure market is another significant industry in the domain. Outdoor leisure encompasses recreational open-air activities typically conducted in semi-natural or natural environments. According to Business Research Insights, the market was valued at around $13.15 billion in 2024 and is expected to grow at a compound annual growth rate of 6.95% between 2025 and 2033, reaching $24.07 billion by the end of the forecast period.
READ ALSO: 10 Best Video Game Stocks to Buy Now and 12 Best Grocery Store Stocks to Buy Now.
How is the American Consumer Behaving?
A report by Deloitte showed that the leisure industry continued to rebound in fiscal Q3 2024, with total net expenditure increasing from -10.3% in fiscal Q2 2024 to -8.5% in fiscal Q3 2024, reaching the highest level since fiscal Q1 2022. The report showed that nine out of eleven leisure categories reflected increased spending, with short holidays and eating out topping the charts with a 4.7 and 5.5 percentage points increase, respectively.
Although long vacations decreased in popularity due to economic uncertainties and growing expenses, short vacations gained public acknowledgment, as consumers are prioritizing affordability. Casual dining rose by 1.7% year on year, with three new locations opening each week. In addition, live sports, festivals, and concerts drove a 4.1 percentage point increase in net spending on culture and entertainment. Leisure activities at home and pub spending also showed increases, climbing by 1 and 1.7 percentage points, respectively.
However, Deloitte Consumer Tracker anticipates consumer spending to fall in nine out of eleven categories in fiscal Q4 2024. Longer holidays and eating out are expected to have the highest fallout, with a decrease of -8.1 points and -5.9 points, respectively. Cautious consumer spending amid potentially rising inflation and economic uncertainties is anticipated to affect the hospitality industry, necessitating value-driven tactics to attract consumers.
Our Methodology
We sifted through stock screeners, online rankings, and ETFs to compile a list of 25 leisure stocks. We then selected the top 12 with the highest number of hedge fund holders as of fiscal Q4 2024. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of hedge fund sentiment.
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).
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United Parks & Resorts Inc. (NYSE:PRKS)
Number of Hedge Fund Holders: 37
United Parks & Resorts Inc. (NYSE:PRKS) is a theme park and entertainment company that owns or licenses a range of recognized brands. These include SeaWorld, Busch Gardens, Aquatica, Discovery Cove, Water Country USA, Adventure Island, and Sesame Place. The company’s portfolio comprises around 13 differentiated theme parks located across Abu Dhabi and the United States.
United Parks & Resorts Inc. (NYSE:PRKS) had around 167,000 guests in fiscal Q4 2024 and 432,000 guests for the fiscal year 2024. It repurchased 9.4 million shares, or approximately 15% of its total shares outstanding in the year, reflecting its history of returning excess cash to shareholders and its strong cash flow generation.
The company has a strong balance sheet. As of December 31, 2024, its net total leverage ratio is 2.94x, and it has approximately $798.4 million of total available liquidity, including approximately $115.9 million of cash on the balance sheet. This gives United Parks & Resorts Inc. (NYSE:PRKS) the flexibility to continue investing in and growing its business.
Overall, PRKS ranks 7th on our list of the best leisure stocks to buy right now. While we acknowledge the potential of PRKS 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 PRKS 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.
