Most consumer discretionary businesses succeed or fail based on the broader economy. Thankfully for the industry, demand trends seem to be healthy as discretionary stocks have gained 4% over the past six months. This performance has nearly mirrored the S&P 500.
Although these companies have produced results lately, investors must be mindful because many are fads and only a few will stand the test of time. On that note, here are three consumer stocks we’re passing on.
Market Cap: $8.26 billion
Established in 1981, Wyndham (NYSE:WH) is a global hotel franchising company with over 9,000 hotels across nearly 95 countries on six continents.
Why Is WH Not Exciting?
Wyndham is trading at $106.74 per share, or 22.3x forward price-to-earnings. To fully understand why you should be careful with WH, check out our full research report (it’s free).
Market Cap: $3.70 billion
Formerly known as Wyndham Destinations, Travel + Leisure (NYSE:TNL) is a global vacation company that provides travelers with vacation ownership, exchange, and travel services.
Why Do We Think TNL Will Underperform?
At $55.18 per share, Travel + Leisure trades at 8.6x forward price-to-earnings. Read our free research report to see why you should think twice about including TNL in your portfolio, it’s free.
Market Cap: $1.64 billion
Sporting a roster of beachfront properties, Playa Hotels & Resorts (NASDAQ:PLYA) is an owner, operator, and developer of all-inclusive resorts in prime vacation destinations.
Why Are We Wary of PLYA?
Playa Hotels & Resorts’s stock price of $13.34 implies a valuation ratio of 26.9x forward price-to-earnings. If you’re considering PLYA for your portfolio, see our FREE research report to learn more.
The elections are now behind us. With rates dropping and inflation cooling, many analysts expect a breakout market - and we’re zeroing in on the stocks that could benefit immensely.
Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.
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