Economic Recovery Finally Starting to Lift Small Cap Vacation Industry Stocks

Another industry that suffered mightily during the recent Great Recession was tourism. Stocks of companies based on the vacation and tourism industry were not only hit hard during the recession but they have  tended to lag behind the overall recovery.

But that could be changing. On April 26 the U.S. Department of Commerce announced  that 4.2 million international

Photo Courtesy Marriott Vacation Club

visitors traveled to the US in February (http://tinet.ita.doc.gov/tinews/archive/tinews2012/20120426.html). That was the 11th straight month of increases in total visits. These international visitors spent an estimated $13.3 billion on tourism-related expenses, nearly a $1.6 billion (or 14 percent) increase over spending in February 2011. In addition, many countries worldwide are experiencing similar tourism and vacation bookings growth as the top nine overseas regional markets posted increases in visits during February 2012.

Here are some randomly chosen small cap vacation- and tourism-related stocks that could be beneficiaries of these increases:

Miami, FL based Interval Leisure Group (Nasdaq: IILG, http://www.iilg.com/) is a leading provider of membership and leisure services to the vacation industry. IILG offers travel- and leisure-related products and services to approximately 2 million member families who are enrolled in various programs.  In March IILG reported strong fourth quarter 2011 results, net income rose 40.7 percent from $6.4 million to $9 million with revenues up over 20 percent.  IILG has a 52-week range of $10.19 to $17.90 and a market cap above $968 million with about 200,000 shares trading daily. IILG closed April 30 at $17.28, no change for the day.

Boca Raton, FL based Bluegreen Corp.(NYSE: BXG, http://www.bluegreenonline.com/) is a marketing, and management company focusing on the vacation ownership industry in the United States. It operates Bluegreen Resorts and Bluegreen Communities.  BXG sells and manages “timeshares” in resorts that are developed and owned by others.  BXG also provides property and homeowners association management. The company had 34 percent quarterly revenue growth during Q1 and a record earnings per share growth. BXG has a $167 million market cap, trades about 69,000 shares daily with a 52-week range of $1.87 – $6.43. It closed April 30 at $5.30, down 7 cents for the day. 

With an enviable vacation stock ticker, Orlando, FL based Marriot Vacations Worldwide (NYSE: VAC, http://www.marriottvacationsworldwide.com/) develops, sells and manages vacation ownership and related products in the United States including the Marriott Vacation Club, resort residential real estate vacation ownership developments under the Grand Residences by Marriott brand, and luxury vacation ownership products under the Ritz-Carlton brand.  VAC has a $1 billion market cap, trades more than 403,000 shares daily with a 52-week range of $15.75 – $29.63. It closed April 30 near its 52-week high at $29.50, up 29 cents on the day.

Madison, WI-based Great Wolf Resorts (Nasdaq: WOLF, http://www.greatwolfresorts.com) operates in North America as a family entertainment resort company. It owns, licenses, operates, and develops drive-to destination family resorts featuring indoor water parks and other family-oriented entertainment activities under the Great Wolf Lodge brand name including themed restaurants, ice cream shop and confectionery, full-service adult spa, kid spa, game arcade, gift shop, miniature golf, interactive game attraction, family tech center, and meeting spaces.  The stock has a 52-week range of $2.10 – $8.11, trades about 723,000 shares a day and currently has a $247 million market cap. It closed April 30 at $7.84 down 1 cent on the day.

Finally for those short vacations focused more on adults who also like to gamble, Monticello, NY-based Empire Resorts (Nasdaq: NYNY http://www.empireresorts.com) operates in the hospitality and gaming industries and owns Monticello Casino and Raceway, a video gaming machine and harness horseracing facility that conducts pari-mutuel wagering through the running of live harness horse races. It also simulcasts harness and thoroughbred horse races into its facility and exports its races to offsite pari-mutuel wagering facilities. NYNY also operates approximately 1,090 video gaming machines and 20 electronic table games at Monticello Casino and Raceway.  Its market cap is just over $67 million with a 52-week range of $1.25 – $3.90 and an average daily volume of about 26,000 shares a day. It closed April 30 at $2.25, down 6 cents on the day.

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