Hello everyone, it’s Rado.
We have decided to rebrand our newsletter from The Seeker to QuantFactory Research.
The shift will focus on providing mainly well-researched investment ideas and swing trades.
First A Recap Of Our Previous Analyses
In our Insightful Charts - 2023/12/04 we called the Bullish Rectangle Formation for $NVDA , supported by strong earnings and a positive outlook for Q4 2024. Our price target was $600, far surpassed by the stock, which is now sitting at $720 a share.
In the Insightful Charts - 2023/11/15 edition, we talked about the Bullish Trend Channel Formation on $CAT . Since then the price is up 30% currently sitting at $322 a share.
In the Insightful Charts - 2023/11/13 we called the Saucer Bottom Formation on $PWR and the Double Bottom on $FTNT . Since then both stocks are up by 20% and 35% respectively.
Friday’s Market Close
Friday marked a significant milestone for the S&P 500, which closed above 5,000 for the first time, driven by a broad advance across major indices. The Nasdaq Composite surged 1.3%, while the Russell 2000 gained 1.5%. However, the Dow Jones Industrial Average settled slightly lower.
Despite concerns about the market being overbought, there was no significant selling pressure, acting as an upside catalyst. Tech and mega-cap stocks performed well, with the Vanguard Mega Cap Growth ETF (+1.2%) and the PHLX Semiconductor Index (+2%) posting notable gains.
The advance-decline line favored advancers by a wide margin at both the NYSE and Nasdaq, indicating widespread participation in the upside moves. Leading sectors included information technology, consumer discretionary, and communication services, benefiting from strength in their largest components.
Conversely, the energy sector saw notable declines, likely due to geopolitical worries surrounding Venezuela's military deployment to Guyana's border. Additionally, the consumer staples sector dropped, impacted by PepsiCo's earnings report.
Despite the release of annual CPI revisions, reactions from the bond and equity markets were muted. Rate cut expectations remained largely unchanged, shifting focus to the upcoming May FOMC meeting.
Important Headlines
Permian Rivals Near Deal to Create $50 Billion Oil-and-Gas Behemoth. - Diamondback Energy could announce a merger deal with closely held Endeavor Energy as soon as Monday, according to people familiar with the matter, assuming the talks don’t hit a last-minute snag.
A boardroom battle at Disney could become the costliest shareholder fight ever, as activist hedge funds vie for board seats and challenge CEO Bob Iger's strategy, with everyday investors holding the key to influence.
Barclays Places $757 Million Bet on U.K. With Purchase of Tesco's Banking Arm - The British banking giant just placed a big new bet on its home market.
Analyst Corner
Today’s Pick
Marriott International MAR 0.00%↑ - Strong trend, backed by strong fundamentals.
Business Profile
The company operates, franchises, and licenses hotel, residential, and timeshare properties worldwide. The company operates through U.S. and Canada, and International segments. As of February 15, 2022, it operated approximately 7,989 properties under 30 hotel brands in 139 countries and territories.
Technicals
Marriott is showing promising signs, with a pivot point set at 238. As long as it holds above this mark, I'm leaning towards a bullish outlook, anticipating further gains. However, if it slips below $238, we might see support levels at $231 and $227, so it's worth keeping an eye on those.
Checking the indicators, the RSI is above 70, meaning either a strong up-trend or an overbought territory, but with the MACD positive and above its signal line, and MAR comfortably above its 20 and 50-day moving averages, things are looking pretty positive overall. Keep an eye on potential corrections, but for now, it seems like smooth sailing ahead.
Fundamentals
Marriott reported strong third-quarter results, exceeding expectations with worldwide Revenue Per Available Room (RevPAR) growing 9% above guidance, driven by gains in Asia Pacific. Total company gross fee revenues reached $1.2 billion, up 13% from the previous year. International Managed Fees (IMFs) rose significantly, while non-RevPAR related franchise fees increased 8%, boosted by robust co-brand credit card performance.
Adjusted EBITDA increased by 16%, and diluted adjusted EPS grew 25% year-over-year to $2.11. The company remains committed to its asset-light model, generating substantial cash and returning $3.4 billion to shareholders in the first nine months of the year through dividends and share repurchases.
Marriott Q3 2023 Earnings Call Summary: Key Points and Future Outlook:
RevPAR growth is expected to be 6% to 7.5% in Q4 and 14% to 15% for the full year.
Total gross fee revenues are expected to rise 17% to 18%.
Adjusted EBITDA growth is expected to be 19% to 20%.
Adjusted EPS growth is expected to be 27% to 28%.
Shareholder returns are expected to be $4.3 billion to $4.5 billion.
Segment Performance:
Leisure transient demand strong, up 7% in room nights globally.
Business transient growth slow but steady, with revenues rising 4% in US and Canada.
Group business rebounded remarkably, with US and Canada group revenues pacing up 19% for the full year.
International:
Cross-border travel strengthened, driving RevPAR growth.
Asia Pacific saw the most significant increase in international visitors.
International airlift to China expected to improve, further boosting Asia Pacific.
Marriott Bonvoy Loyalty Program:
Membership reached 192 million.
Mobile app adoption growing, with downloads up 19% year-over-year.
MGM strategic licensing agreement to launch in early 2024.
Development:
Pipeline reached a record high of nearly 557,000 rooms.
Strong interest in mid-scale brands like City Express, Four Points Express, and StudioRes.
My take:
Marriott presents a compelling case for bullish sentiment, supported by its robust third-quarter performance, positive technical indicators, and optimistic outlook for key financial metrics in 2023. While mindful of potential market fluctuations, the current landscape suggests favorable conditions for Marriott's continued growth trajectory, making it an intriguing prospect for investors seeking exposure to the hospitality sector's recovery and long-term value creation.
What To Watch
Earnings from KO 0.00%↑, CSCO 0.00%↑ and SHOP 0.00%↑
Inflation data from the US and UK are on the radar.
Hedge fund 13F filings for Q4.
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Disclaimer: Please note that the information provided in this article is for general informational purposes only and does not constitute financial, legal, or professional advice. The information provided should not be relied upon as a substitute for financial, legal, or professional advice. Before making any decision, it is important to consider all relevant information and consult with a professional who can provide personalized advice based on your specific circumstances. The author and publisher of this article cannot be held liable for any actions taken based on the information provided. This is not a recommendation to buy or sell any specific securities or financial instruments.