Will Travelers Bet on Booking?

05/01/2020 5:00 am EST

Focus: CONSUMER

Ian Wyatt

Publisher & Chief Investment Strategist, Wyatt Investment Research

Global stocks have been showing a glimmer of hope as states begin debating how to lift the stay-at-home restrictions that were meant to slow down coronavirus, notes Ian Wyatt, growth stock expert and editor of Million Dollar Portfolio.

Frankly, I’d be surprised if we get back to anything resembling normal before June, but the fact that those conversations are happening at all is a good sign. It’s no wonder that stocks are looking for some sort of direction from here.

I don’t think we’ll see the markets really take off, at least not until we have some clearer idea on when this pandemic might end. I look for at least a couple of more months of sideways action in the meantime. That doesn’t mean there aren’t any stocks worth buying right now.

One company getting hammered because of the novel coronavirus pandemic is Booking Holdings (BKNG). The company is one of the leading online travel facilitators in the world, connecting travelers with flights, rental cars, hotels, apartments, vacation packages — pretty much anything travel-related.

In this case, the worry isn’t about ad revenue, it’s the fact that most of the world is under quarantine orders. As a result, nobody’s moving, airlines are essentially grounded, hotels are wondering how they will stay in business . . . you get the drift.

As investors, we have to keep in mind that Booking is a monster in the online travel booking industry and, after securing this loan, it will survive.

Once this crisis is over, I suspect, the industry will come back with a vengeance as business travel approaches some sort of normal and leisure travelers just want to go somewhere . . . anywhere.  We’re all going to need a change of scenery once this is over, which Booking will be happy to help us do.

This pandemic has been challenging for all of us, in a lot of ways, and there’s a good chance we’ll emerge from these stay-at-home orders facing a “new” normal. But we will return to some sort of normal.

he companies that have the staying power to survive the crisis will once again return to profitability.

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