Having rencently been in China, I'm back, but in a way, I'm still there.
that I've fallen in love with that country, but isn't it great to not
have any responsabilityfor a while? Alone, in the
middle of nowhere, wandering across town, talking to strangers, eating street food, drinking
beer and worry about nothing at all? To me, it's the definition of
Maybe my experience was even better because I've had the chance of staying in two Marriott
while I was in China. Both hotels were great. They were probably the fanciest hotels where I've been in my life. In China, they weren't
that expensive (200-250$ a night) while in Canada or in the States (or
worst, in Europe), they would have been at least 350$ a night.
never thought about investing in that kind of stock before I saw that
Thomas Gayner (Markel Asset Management) had about 4% of his portfolio
invested in Marriott. But it made me curious...
Let's take a look at some numbers:
Average PE ratio last 5 years: 28
Current forward PE ratio: 20
Average annual sales growth last 5 years: 14%
Average annual earnings growth last 5 years: 25%
Current ROE: 32
Debt level: Moderate-High, but that industry needs mortgages because of heavy investing in big buildings well located (usually downtown).
Free cash flows: They beautifully grew every year since 2012
are the threats? Airbnb?
I don't think that people going to Marriott
are looking for a cheap alternative in someone's else house. Probably
that a small percentage of consumers would try Airbnb, but I don't
think that there's a danger there.
going to Marriott are looking for a luxury place but not overly expensive.
There's some competition , but I don't see nothing new and I don't
see how things should change in the short term.
Plus, there's the value of the name. If you've ever been in a Marriott, you know that it's a synyonum of quality. I can still smell the wonderful smell of the hall of my hotel downton Beijing. That smell made me forget many times that 5 minutes before, I went through some piss smells on the streets of Beijing.
So, I believe that Marriott is an interesting investment.