Having rencently been in China, I'm back, but in a way, I'm still there.
Not
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
freedom.
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.
I've
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
What
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.
Actually, people
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.
Airbnb will dominate tourism accommodation
RépondreSupprimerBusiness travelers who works for company that control cost loosely or are plenty of cash will go to luxury hotel
It is a cyclical business that will suffer if the trade tariff is escalating because global trade will suffer if it goes that way
I think that at least 80% of businesses will suffer from that trade war.
SupprimerSelf driving cars will be a threat as people can travel longer and may not need to stop at a hotel for a rest.
RépondreSupprimerInstead of stopping at that specific Marriott, they’ll stop at the next?
SupprimerA wonderful business. I don't own it because they need to be levered 3.25 x with debt and i think long-term rates will only continue to rise. But you could do a lot worse.
RépondreSupprimer