The Best Travel-related Stocks to Buy While the Market Is Down, According to Finance Experts
Before the coronavirus hit, you invested in travel by, well, traveling. You supported hotels by staying in them. You showed loyalty to your favorite airlines by flying with them.
While stay-at-home orders due to the coronavirus pandemic might make those days feel like a distant memory, you can still invest in travel from the comfort of your couch, and experts say you should if you have the extra cash on-hand.
“Airlines, for example, are part of our country’s infrastructure, and it’s not in the country’s best interest to let these companies fail,” says JJ Kinahan, chief market strategist at TD Ameritrade. “We need them to do business, so they’re going to continue to be supported.”
If you’re in it for the long-haul, and not looking for what Kinahan calls a “quick pop,” major travel companies, and not just airlines, are likely to be a solid investment. “We may stay home longer than expected, so there will be volatility in the short-term, but eventually, the stay-at-home-orders are going to come off,” he says. And that’s when you’ll score some returns you can put toward your next vacation.
Jason Moser, an advisor/analyst at The Motley Fool, seconds these sentiments. “A lot of strong companies are essentially on sale, and the market is a forward-looking mechanism—it’s not about today, it’s about the future.”
A few things to keep in mind when looking at your own future investments:
- It’s okay to support companies you have an emotional attachment to (your experience as an avid traveler certainly matters), but make sure you review reports from reputable analysts, too.
- Look at a company’s debt in comparison to other companies in the space. “The more debt, the more you should be concerned,” Kinahan says.
- Don’t overthink the timing. “Generally speaking, you’re never going to buy at the bottom and you're never going to sell at the top,” Moser says. “The more long-term your investment, the less timing comes into play.” Kinahan adds that it’s best to buy shares in smaller batches, so you can catch the market at different moments.
With that, here are some travel-friendly stocks Moser’s eyeing now:
Google: The tech company is making substantial investments in the travel space, completely changing the way we research, plan, and book our trips, even the way we drive—or don’t drive—thanks to self-driving cars. Like a lot of companies, you can now buy shares at a steal.
Booking.com: Moser calls the popular booking site “one of the highest quality businesses, based on its network, resources, and dominance in the space.” It also offers exposure to a ton of hotels, not just one, and he’s confident it will “emerge stronger than before.”
Disney: Yes, the parks are closed until further notice, but Disney is more than just a parks company (see: Disney+), a crucial detail. It’s a large, established, and well-diversified business that has lots of tools at its disposal. “A company like Disney has plenty of capital resources,” Moser says. “If they ever need financing, they have a number of different ways to get it and a lot of different levers to pull.”
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