Gas prices at multiyear highs won’t impede these summer travel stocks, traders say

Gas prices surged past $3 a gallon, the very best since late 2014, because the Colonial Pipeline shutdown squeezed provides.

The worth rise comes forward of what’s anticipated to be a busy summer driving season with reopenings and pent-up demand fueling shopper travel.

Mark Tepper, president of Strategic Wealth Partners, doesn’t anticipate that to derail summer highway journeys, although.

“If you think about it, a family of four has received over $10,000 from the government over the course of the last year. Come July 1, they’re going to get $300 per month per kid, so you know an extra 100 bucks a month or so that they’ll pay at the pump is really nothing in the grand scheme of things given what’s going on right now,” Tepper informed CNBC’s “Trading Nation” on Wednesday.

Tepper added that rising airline prices can also push customers to take highway journeys over flying to trip locations.

“The company I like right here is Six Flags. I like the regional amusement park play over the destination parks like Disney and SeaWorld. I think they’re easier to get to, you can drive there, you can make a day trip out of it, you can go for a weekend,” Tepper mentioned.

Shares of Six Flags, a $3.5 billion park operator, are up 21% in 2021, greater than double the positive aspects for the broader market. Tepper mentioned the inventory has room to develop.

“Six Flags trades at a valuation discount and I really think expectations and earnings revisions are going to go up and up and up over the course of the next several quarters for those guys, so I think it’s a buy here,” he mentioned.

The firm is predicted to report a lack of 82 cents a share in fiscal 2021, in accordance with FactSet, narrower than the pandemic-related lack of practically $5 a share in 2020. It is forecast to return to a revenue of $1.92 a share in 2022.

Gina Sanchez, CEO of Chantico Global and chief market strategist at Lido Advisors, likes Six Flags within the brief time period however says one other amusement park play is the higher wager in the long term.

“Disney has a few other legs to stand on besides just the parks play because they also have Disney Plus and a lot of other elements to their business,” Sanchez mentioned throughout the identical interview. “We think that it’s still attractive because the outlook for these destination parks is still quite gloomy. … Disney was the hottest park globally before Covid. I think it will still be the hottest park after Covid.”

Disney will report earnings after the bell Thursday. Analysts anticipate earnings of 26 cents a share, down from 60 cents a share a yr earlier. Its parks and experiences section make up 23% of whole income.

Disclosure: Lido holds Disney.


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