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  • Small Cap Travel and Leisure Stocks DTG, CAR, UTA and MNTG Climb and Climb 0 comments
    Jul 13, 2009 1:28 PM | about stocks: DTG, CAR, ERI
    Car Renter’s DTG up 866% and CAR up 544% in 3-Mos and MNTG sets a 52-Wk high.

     

    Well it appears that gas prices have leveled off after their typical May run-up and people will continue to take a break or a vacation; even if it's only visiting local environs, what's now considered a 'staycation.' Traveling 'locally' is something car rental agencies have come to count on for revenue. "Why put the miles on my car?" is a common summertime question.
    Even though car rental fleets are now more 'fuel efficient' the costs have gone up to the consumer and I believe the rate hikes are based on local demands.     
    Travel and Leisure stocks are, in my eyes, a seasonal play and event driven: the holidays, graduation, vacations. This year, the airline stocks and theme parks are not faring so well even though discounts are broadcast. But there are some bright spots for investors other than car rental companies like travel agencies and regional casinos.
    DJ US Travel & Leisure Index
    Have a look at Dollar Thrift Automotive (DTG) http://www.dtag.com/ trading on the NYSE in the $14 range. DTG has gone up 866% three months to a market cap of $319 million on an average daily trading volume of 763,973 shares.
    DTG gets the bulk of its incoming revenues from Florida, California, Hawaii, Arizona, Texas and Nevada. Six states that live for tourism in the summer. DTG has 741 locations in the United States and Canada, of which 400 are company-owned stores and 341 are franchised stores.
    A lot of analysts have trouble with DTG's long term debt vs. cash ratio ($1,851,500,000 billion versus $93 million) and as a long-term play, I understand their point. But as I said, I consider travel and leisure investments as strictly short-term and seasonal.
    At $14, DTG is near its 52-week high of $15.05 set on the first of this month and far, far above its 52-week low of $0.90 set on 03-03-09. Per haps the money has already been made in this stock; but perhaps the run-up isn't done quite yet. At $14, DTG is above both its 50-day and 200-day moving averages. DTG has $1.66 billion in trailing twelve month revenues to somewhat counter the debt figure, but a long-term red flag for me would be its trailing twelve month revenues per share of $77 versus its trailing twelve month diluted EPS of -$2.40.
    A 3-MONTH CHART OF DTG
    Another car rental company that has just leaped up in value (up 544% in three months) is Avis Budget Group (CAR) http://www.avisbudgetgroup.com/ trading on the NYSE in the $5.66 range. Avis presents a similar opportunity and dilemma. Its trailing twelve month revenues per share are $56 but its trailing twelve month diluted EPS is -$11.42. A clear, short-term consideration.
    A THREE MONTH CHART OF CAR
    Headed to China this summer?
    Obviously by the performance of Universal Travel Group (UTA) http://www.chutg.com/ trading on the AMEX in the $9 range, a lot of people are headed to Asia; period. UTA has seen its market cap increase to $127 million in recent months on a 3-Month average daily trading volume of 169,425 shares.
    Other than a June 'buy' coverage initiated by Emissary Capital Group and UTA's CEO ringing the bell at the NYSE AMEX Market on June 29th, there's been no significant news to propel the stock as high as it is. I think this is one of those off-the-radar stocks that a lot of people own; but keep to themselves.  
    UTA is a growing travel services provider in the People's Republic of China specializing in online and customer representative services to the travel service industry. UTA offers packaged tours, air ticketing and hotel reservation services. UTA joined the broad-market Russell 3000, Russell Global and Russell MicroCap Indexes on June 26, 2009.
    This might be more than just a seasonal play.
    At $9, UTA is below its 52-week high of $12.60 set on 06-12-09 and far, far above its 52-week low of $0.97 set on 03-31-09. At $9, it is below its 50-day moving average by a few pennies and above its 200-day moving average of $4.83. Its shares out versus float ratio is near parity.
    A 3-MONTH CHART OF UTA
    A Day At The Races
    Finally, here's a stock I covered on June 22 that was waiting for news and the news came in last Friday: Ohio Governor Ted Strickland and state lawmakers reached an agreement to help fill a $3.2 billion gap in the state's budget by allowing racetracks to install slot machines.
    That was the news Ohio-based MTR Gaming (MNTG) http://www.mtrgaming.com/ was looking for. MNTR trades on the Nasdaq in the $4 range with a current market cap of $109 million. Its trading volume tripled today from its 3-Month average daily trading volume of 81,500 shares.
    MNTG has slot machine gaming operations and live thoroughbred horse racing with parimutuel wagering, as well as online and telephone wagering on horse races. MNTG owns and operates The Mountaineer Casino, Racetrack & Resort in Chester, West Virginia; Presque Isle Downs & Casino in Erie, Pennsylvania; and Scioto Downs in Columbus, Ohio.
    MNTG set a 52-week high on Friday and in the $4 range is ahead of both its 50-day and 200-day moving averages. I would still like to see more shares in the float.
    A 3-MONTH CHART ON MNTG

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    Stocks: DTG, CAR, ERI
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