Topic: Growth Stocks

Aggressive portfolio: Rising vacation travel boosts Wyndham’s earnings

Wyndham Worldwide, symbol WYN on New York, is the third-largest hotel company in the world, with 7,110 franchised hotels. It operates under a number of brands, including Wyndham Hotels and Resorts, Ramada, Days Inn, Super 8, Wingate by Wyndham, Baymont Inn & Suites, Microtel Inns & Suites, Hawthorn Suites, Howard Johnson, Travelodge, Knights Inn and Ameri-host Inn.

We analyze Wyndham in Stock Pickers Digest, our newsletter for investing in your aggressive portfolio.

In addition to hotels, Wyndham manages a number of vacation resorts, rental properties, luxury clubs and time-shares. This wide range of operations gives Wyndham more consistent cash flow than most of its competitors, who mainly focus on hotels.

On November 30, 2010, the company bought James Villa Holidays, which owns 2,300 Mediterranean vacation rental properties. Wyndham now has 97,000 vacation rental properties worldwide.

In the three months ended December 31, 2010, revenue rose 2.6%, to $937.0 million from $913.0 million a year earlier. Wyndham gets most of its revenue from vacation rather than business travel, and vacation bookings are rising in the wake of the recession. Wyndham’s occupancy rate rose 8.9% in the latest quarter.

The aggressive portfolio stock’s earnings rose 6.9%, to $78.0 million from $73.0 million. The company bought back 9.3 million of its own shares over the past year. Due to fewer shares outstanding, earnings per share climbed 7.5%, to $0.43 from $0.40. If you exclude acquisition and restructuring costs, the company earned $0.46 a share. That beat the consensus earnings estimate of $0.44.

You can get our full analysis, including our clear buy/sell/hold advice on Wyndham and dozens of other stocks that may be suitable for the part of your aggressive portfolio in Stock Pickers Digest. What’s more, you can get one month free when you subscribe now. Click here to learn how.

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