Market Overview

A Piper Jaffray Analyst's Travel Stock Pick, Pan

A Piper Jaffray Analyst's Travel Stock Pick, Pan
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Several vacation stocks including Wynn Resorts, Limited (NASDAQ: WYNN) were hard-hit last week, but there is at least one name that investors can have confidence in buying within the travel sector, according to a PiperJaffray analyst. 

The Pro

Craig Johnson, Piper Jaffray's chief market technician, talked travel stocks during a CNBC "Trading Nation" segment.

The Thesis

Investors should consider buying stocks with near-pure domestic exposure that offer a large degree of insulation from international headwinds plaguing other names, Johnson said. For example, Wynn's stock decline can be attributed to growth concerns in Macau, where gross gaming revenue rose in July was lower than he expected, he said. 

A company like Boyd Gaming Corporation (NYSE: BYD) generates nearly all of its revenue in the U.S., and the stock also looks attractive from a technical point of view, Johnson said. Boyd's 200-day chart shows the stock is trading near its uptrend support line, with good downside support if the stock dips to $34, he said. If the stock closes above $39 in the near term, it could indicate another leg higher is imminent, the analyst said. 

Investors may want to avoid cruise names such as Carnival Corp (NYSE: CCL), a stock that's "rolling over," Johnson said. Carnival closed Friday at $59.05, which isn't far removed from its 52-week low of $56.45, and the chart suggests another leg lower is likely for the company, which derives at least one-third of its revenue from international markets, he said. 

Related Links:

'Distinctly Positioned' Las Vegas Sands Is Morgan Stanley's Top Gaming Pick

Cramer Blasts Goldman Sachs For Being Wrong On Cruise Stocks

Photo by Gribiche/Wikimedia. 

Posted-In: CNBC Craig Johnson Cruises leisure Piper JaffrayTravel Media General Best of Benzinga


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