By Mary-Lynn Cesar for Kapitall.
For the first time since 2011, the US economy shrank, falling to
seasonally adjusted annual rate of 1%
during the first three months of the year. Yet, in Florida, things
are definitely looking brighter.
The New York Times
covered the Sunshine State and its recovering economy in an
. Florida, which frequently has the country's highest share of
foreclosures, leads the nation in job growth this year and boasts
the third-best record in job creation over the last twelve
cited investment in tourist operations during the recession as a
crucial driver of the state's nascent comeback. In June 2010,
Universal Orlando-owned by
subsidiary NBCUniversal-opened the Wizarding World of Harry Potter.
The theme park, which cost a reported $265 million to build,
boosted attendance at Universal Orlando
within six months of opening.
Orlando, which experienced a 27% increase in visitors between
2012 and 2013, isn't the only location to see an influx of
tourists. Statewide, the total number of visitors reached 94.7
million last year, up 6% from 89.3 million in 2012.
Walt Disney Company
also poured billions into its theme parks when the economy
was at a low point
and has reaped significant benefits from the investments. The
entertainment giant reported a
record $45 billion in revenue
for fiscal year 2013, with its fast-growing theme park segment,
Walt Disney Parks and Resorts, seeing $14.1 billion in annual
revenue, a 9% increase from a year earlier. Record attendance
at Disneyland in California and Florida-based Walt
Disney World and higher ticket prices contributed to the
segment's uptick in sales.
While consumers avoided unnecessary expenses during the
recession, they have returned to theme parks in droves
as economic conditions have improved. Market research firm
IBISWorld expects revenue from US theme parks to total a
record $15.4 billion
With summer around the corner, we decided to look for stocks
that stand to gain from consumer interest in theme parks and
other tourist ventures. To begin, we constructed a group of
stocks belong to the tourism industry, including stocks from the
Dow Jones US Travel & Tourism Index
, lodging industry, and the resorts and casino industry. We
also added theme-park-owning and resort-owning stocks from the
entertainment-diversified, general entertainment, and sporting
Next, we screened for stocks
rallying above their 20-day, 50-day, and 200-day simple
moving averages (
. This means that the stocks are performing above their moving
average over a specific period of time and indicates that they
have strong upward momentum.
We then screened for encouraging signs of profitability as
measured by DuPont analysis. The DuPont equation uses a company's
profit margin, total asset turnover, and financial leverage from
the most recent quarter (MRQ) to assess its return on equity (ROE).
The formula is as follows:
ROE = Net Profit Margin (Net profit/Sales)*Total Asset
When profitability stems from an increase in net profit margin
and/or asset turnover, the firm's source of growth is viewed
as positive. However, an increase in leverage ratio is
considered a negative source of growth. Therefore, we looked for
an increase in net profit margin and/or asset turnover in
the most recent quarter
We were left with three stocks on our list. Do you think these
stocks will see higher sales this year? Use this list as a
starting point for your analysis, and let us know what you think in
Click on the interactive chart to view data over
1. Comcast Corporation
): Provides entertainment, information, and communications products
and services in the United States and internationally. Market cap
at $134.6B, most recent closing price at $52.04.
The stock is currently rallying 1.56% above its 20-day SMA,
3.27% above its 50-day SMA, and 6.95% above its 200-day SMA.
MRQ net profit margin at 10.75% vs. 9.39% y/y. MRQ sales/assets
at 0.11 vs. 0.098 y/y. MRQ assets/equity at 3.077 vs. 3.245
Comcast owns Universal Parks & Resorts through its
subsidiary NBCUniversal. Universal Parks & Resortsowns or
licenses several theme parks around the world. Its current
properties are Universal Studios Hollywood in Los Angeles,
California; Universal Orlando Resort in Orlando, Florida; Universal
Studios Japan in Osaka, Japan; and Universal Studios Singapore on
the island of Sentosa, Singapore.
Three new parks are being constructed overseas: Universal
Studios Beijing (expected opening 2018), Universal Studios Moscow
(expected openng 2017), and Universal Studios South Korea (expected
2. Walt Disney Co.
): Operates as an entertainment company worldwide. Market cap at
$144.78B, most recent closing price at $84.00.
The stock is currently rallying 3.14% above its 20-day SMA,
4.65% above its 50-day SMA, and 15.68% above its 200-day SMA.
MRQ net profit margin at 16.46% vs. 14.34% y/y. MRQ sales/assets
at 0.141 vs. 0.13 y/y. MRQ assets/equity at 1.84 vs. 1.933 y/y.
The Walt Disney Parks and Resorts segment manages the company's
theme parks and resorts. Its current properties are Disneyland
Resort in Anaheim, California; Walt Disney World Resort in
Lake Buena Vista, Florida; Tokyo Disney Resort in Urayasu, Japan;
Disneyland Paris in Marne-la-Vallée, France; and Hong Kong
Disneyland Resort in Hong Kong, China.
Shanghai Disney Resort, the company's newest property, is
expected to open at the end of 2015.
3. Hertz Global Holdings, Inc.
): Engages in the car and equipment rental businesses worldwide.
Market cap at $13.06B, most recent closing price at $29.30
The stock is currently rallying 2.13% above its 20-day SMA,
5.74% above its 50-day SMA, and 13.50% above its 200-day SMA.
MRQ net profit margin at 3.21% vs. 2.64% y/y. MRQ sales/assets
at 0.438 vs. 0.388 y/y. MRQ assets/equity at 8.873 vs. 9.357
Hertz has a rental car center inside Universal Orlando,
next to the Attraction Ticket Center. The company is also in
the middle of a five-year extension to an existing partnership with
Euro Disney that gives Hertz premium access to guests at
Disneyland Paris hotels.
(List compiled by Mary-Lynn Cesar. Accounting data sourced
from Google Finance. Quarterly sales data sourced from Zacks
Investment Research. All other data sourced from Finviz.)
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